SHANGHAI, Jun. 3 (SMM) - Scrap copper shortfalls have forced many leading copper enterprises including Zhongtiaoshan Copper and Penghui Copper to cut copper capacity. Jiangxi Copper has suspended tens of thousands mt/yr of capacities.

Jiangxi Copper's Deputy General Manager Wu Yuneng expressed: Shandong Penghui and Zhongtiaoshan both cut their output, so did we Jiangxi Copper. We also conduct maintenance at an 400,000 mt/yr enterprise in Qingyuan due to raw material shortages.

Mixed Attitude towards Copper Market
Market players take a mixed attitude toward copper prices as copper prices have been fluctuating after rebounding in early May. Some of them see prices rising due to spot supply shortfalls, while ongoing oversupply also distresses the market. Most market players believe effects from copper imports for financing purpose on the market will be limited.

 "Copper prices have both commodity and financial distributes. But supply tightness should push up prices. Domestic copper supply was indeed tight as producers cut output, and this gives support to copper prices." said Jiangxi Copper's Deputy General Manager Wu Yuneng.
 
80% Copper Tube/Pipe Producers See Orders Steady in May
SMM undertook a survey of 21 domestic copper tube/pipe producers and found that over 80% of them believe orders will remain steady in May.

81% enterprises anticipate orders should remain stable in May. Demand for copper tube/pipe will not decrease due to the high demand season for air conditioner in May. Besides, air conditioner distributors should deplete inventories noticeably as the energy saving subsidy policy will come to an end, and will maintain air conditioner purchases.
 
Copper Output Remains a High in April
The China Nonferrous Metals Industry Association announced May 27 that refined copper output in April reached 557,300 mt, slightly below March levels and still at a high.

The most recent SMM survey shows that the average operating rate at domestic copper smelters in April was 89.45%, down 2.53 percentage points but up 2.11 percentage points.

Large amounts of domestic newly-built capacity will be brought online soon. According to SMM incomplete statistics, 780,000 mt/yr of copper smelting capacity will come online in 2013, when combined with other capacities under construction, total capacity due to be put into operation reaches 1.15 million mt/yr/

China Customs reported China's copper concentrate imports in March and April were 777,800 mt and 842,800 mt, respectively. Although the figures was lower than the record high of 935,300 mt hit in December 2012, is was up 46% and 77% compared to the same period last year.

TC of spot copper concentrate remains high recently around USD 70-80/mt. Smelters believe TC will have room to rise further in the near future.
 
Analysts Revised Copper Surplus
A number of closures at copper mines and suspended supply caused some analysts to revise their forecasts for oversupply, but more impetus is needed to turn the market to shortfalls.

 "All analysts are adjusting their forecasts, so did we. We expected oversupply of 300,000 mt early in the year, but may halve the forecast now." said Robin Bhar, analyst of Societe Generale in London.