SMM Exclusive: How Is Copper Production and Joint Cut Plan Going in China from Jan. to Apr.?

SHANGHAI, May 16 (SMM) – China’s supply-side reform has attracted a great deal of market attention since its introduction, and how has the reform affected the Chinese copper market during the first four months of 2016? SMM will give you exclusive copper output data throughout the period for a clear picture. 

According to SMM exclusive data, copper output in China was 644,000 tonnes in April, up 10 per cent from April 2015, and total output amounted to 2.51 million tonnes during the first four months of 2016, up 5% per cent. 

“The year-on-year rise in copper output is due largely to low base in 2015,” SMM copper analyst points out. 

Many major domestic copper smelters conducted unit maintenance in 2015, and output losses from unit maintenance reached 242,000 tonnes over the year according to SMM data. 

Some market players attributed large-scale unit maintenance mainly to sluggish copper prices. But SMM believes that poor conditions at furnaces after using too much blended ores at some SMEs smelters is a more rational explanation for it, since high term TCs ($107 per tonne) was profitable for their smelting. 

“Output from newly-commenced copper capacities also contributes to higher output over the period,” SMM adds. 

SMM survey finds that newly-increased refining copper capacities were 650,000 tonnes in 2015, and will be around 320,000 tonnes in 2016.  

Then, how is the joint cut plan going now at major copper smelters announced in late 2015? 

According to SMM survey, only 5 major domestic copper smelters have announced to reduce their 2016 output, down by a total of 260,000 tonnes, lower than the previous figure of 360,000 tonnes. Moreover, production cuts varied one from another among those in the joint line. Production was down in Tongling Nonferrous, Jiangxi copper and Jinchuan during the first four months of 2016, while output in Yunnan Copper and Daye Nonferrous was up, SMM survey shows. 

“China’s copper output is expected to be at 632,000 tonnes in May due to unit maintenance in Jiangxi Copper and Chifeng Gold Sword,” SMM estimates.  

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