SHANGHAI, Mar. 29 (SMM) – In late 2015, ten major Chinese copper smelters met to agree on a joint output cut following sharp price declines, and announced to reduce production by 350,000 tonnes in 2016. As entering April, has the cut plan being implemented as schedule?
Approximately 260,000 tonnes of copper smelting capacity has been confirmed to be cut in 2016 at the ten producers so far, according to SMM sources.
Moreover, the cut target will be mainly on secondary copper production in 2016, as 2016 term TCs for copper concentrate remains favorable for producing primary copper, with copper ore as raw materials, SMM analyst points out.
According to SMM data, the average price spread between #1 bare bright and refined copper was less than 1,000 yuan per tonne during 2011-2015.
Little price advantages, coupled with falling imports of scrap copper and environment protection pressures, has significantly squeezed profits for domestic secondary copper production, SMM added.
During 1Q, copper production at the ten smelters is stable, SMM survey found. China’s copper supply is expected to grow slightly in 2016, SMM expected.
“China’s copper refining capacity is expected to increase in 2016, but the growth of new refining capacity will slow down,” SMM copper analyst said at the 2016 Copper&Aluminum Summit from Mar. 17-18 in Shanghai.
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