Copper-related stocks advanced notably in today's trading session. At the time of writing, CHINFMINING (01258) rose 6.75% to HK$14.23, CMOC (03993) gained 4.8% to HK$19.23, JIANGXI COPPER (00358) increased 4.23% to HK$38.44, and ZIJIN MINING (02899) was up 3.83% at HK$38.00. The catalyst for the rally stems from a sharp contraction in sulfuric acid supply from the Middle East, caused by disruptions to shipping through the Strait of Hormuz. This has triggered a rapid increase in sulfuric acid prices both domestically and internationally, with prices in China approaching 1,400 yuan per ton.

Hydrometallurgy, the primary copper smelting process used in Africa, is highly dependent on sulfuric acid supply. For instance, the Democratic Republic of Congo relies on sulfur imported from the Middle East for nearly 80% of its sulfuric acid needs. Northeast Securities highlighted a continued tightness in copper concentrate supply alongside rising supply risks. Treatment and refining charges (TCs) have fallen deeply into negative territory, reaching -$78 per dry metric ton. Adding to the pressure, China plans to halt sulfuric acid exports starting in May, exacerbating supply risks for hydrometallurgical copper in regions like Chile and Africa.

On the demand side, performance has exceeded expectations. The operating rate for SMM refined copper rod plants reached 75.06% in March, surpassing expectations by 9.05 percentage points. Furthermore, domestic social inventories that built up during the Spring Festival have been largely depleted. With an anticipated improvement in macroeconomic sentiment, both copper prices and copper mining stocks are positioned for significant upward potential.