Why could copper and cobalt sales accelerate in the fourth quarter?

  • Congestion at South African ports meant CMOC’s copper sales in the third quarter of 2026 were 10 thousand to 20 thousand tonnes lower than production. Management said logistics have recovered, so previously disrupted sales could improve.
  • The gap between cobalt production and sales was larger: amid export restrictions in the Democratic Republic of the Congo, the company produced 95.7 thousand tonnes of cobalt in the first three quarters of 2026, but sold only 12.7 thousand tonnes.
  • Management said the company’s available cobalt export quota for 2026 totals approximately 37 thousand to 38 thousand tonnes, including quota carried forward from 2025. The company plans to use the full quota, which means cobalt shipments will increase significantly in the fourth quarter.

Will cost pressure quickly disappear as raw material prices fall?

  • Higher sulfur, sulfuric acid and diesel prices pushed up operating costs at TFM and KFM. Sulfur and sulfuric acid prices have fallen by 200 to 300 dollars per tonne from their peaks, which could provide some cost relief.
  • Morgan Stanley expects costs in the fourth quarter of 2026 to be lower than in the third quarter, but still high and above first-half levels.

What caused molybdenum and tungsten production to decline?

  • In the first three quarters of 2026, molybdenum production was 9692 tonnes, meeting 75% of the full-year target; tungsten production was 5034 tonnes, meeting 72% of the target.
  • Management attributed the quarter-on-quarter decline in production mainly to lower ore grades rather than safety restrictions, and expects tungsten ore grades to continue falling.

What other points matter for the trading business and the bank’s valuation?

  • Higher metal prices and business expansion increased IXM’s working capital needs.
  • Morgan Stanley rates CMOC’s Hong Kong-listed shares Overweight, with a target price of 21.10 Hong Kong dollars; the report lists a closing price of 12.42 Hong Kong dollars on 26 October 2026. The bank uses a discounted cash flow model, assuming a weighted average cost of capital of 10.7%.
  • Downside risks listed by the bank include copper production falling significantly below company guidance, and weaker cobalt prices resulting from soft industrial and domestic electric-vehicle demand.