Stable Volumes, Higher Prices

On 2026-08-05, Western Mining (601168.SH) released its 2026 interim report, with operating revenue of RMB 39.4 billion, up 25% year on year; net profit attributable to shareholders of RMB 4.17 billion, up 123% year on year, surpassing in just half a year the full-year profit of any previous year. The core driver of revenue growth was stable volumes and higher prices across metals. In H1 2026, copper prices fluctuated widely in a historically high range, up 3.8% from the start of the year; molybdenum concentrate prices rose 32.7% from the start of the year. Output of major products exceeded plan: mined copper 89,700 tonnes (106% of plan), mined zinc 63,900 tonnes (102%), and mined molybdenum 2,368 tonnes (109%). Yulong Copper (58% held) posted net profit of RMB 5.06 billion, with a net margin of 60%, contributing approximately RMB 2.93 billion to attributable profit, or 70% of the company's total. The smelting segment swung to profit, with the copper/lead/zinc smelting business posting combined profit of about RMB 600 million, driven largely by surging sulfuric acid prices. Dongtai Lithium Resources (27% held) posted net profit of RMB 1.03 billion, contributing investment income of about RMB 280 million. Gross margin rose from 19.6% in 2025 to 23.9% in H1 2026, while the main period expense ratio fell from 3.8% to 2.8%. In H1 2026, LME copper traded in a range of USD 12,000–14,500/t, averaging about USD 13,000/t.

All Levers Pulled

Shanghai copper futures main contract fluctuated in a range of RMB 92,000–114,000/t. On the supply side, Grasberg's restart was postponed to 2028, Kamoa-Kakula cut output after a seismic event, and Collahuasi's environmental permit was revoked, lowering 2026 global copper production guidance to 363,000 tonnes, a net decline of more than 90,000 tonnes versus 455,000 tonnes in 2025. On the demand side, State Grid's fixed-asset investment under the 15th Five-Year Plan totals RMB 4 trillion, up 40% from the 14th Five-Year Plan; new energy vehicles use about 80 kg of copper per vehicle, four times that of internal combustion engine vehicles; AI data center copper consumption is expected to rise to 740,000 tonnes in 2026. Goldman Sachs forecasts an LME copper target of USD 13,735/t by end-2026; UBS sees potential USD 14,000/t. On capacity expansion, Yulong Phase III expansion (to 30 million t/yr) is expected to start production in early 2027, lifting annual copper output to 180,000–200,000 tonnes; the pre-feasibility study for Phase IV (45 million t/yr) is complete, with longer-term output potentially reaching 250,000–300,000 tonnes. The Anhui Chating copper project (copper 1.748 million tonnes, associated gold 248 tonnes), acquired in 2025 for RMB 8.6 billion, is targeted to start production by end-2030. The company holds copper resources of 8.309 million tonnes, with a static mine life of about 46 years.