SHANGHAI, Apr 10 (SMM) – Growth in China’s output of copper cathode fell short of expectations in March as Chalco’s Dongnan smelter, which came online in the fourth quarter last year, has not reached full capacity and as sales pressure prompted some small smelters to slow production.
China produced 751,100 mt of copper cathode last month, up 4.38% from February and 5.28% from March 2018, showed an SMM survey. SMM expected production to increase by 5.93% in March.
In the first three months of 2019, copper cathode output amounted to 2.21 million mt, up 4.17% from a year ago.
Most small and medium-sized smelters expressed concerns about declining treatment charges for spot copper concentrate but their production has yet to be affected. Healthy prices of sulphuric acid would balance the risks from weaker concentrate TCs.
SMM also learned that copper scrap supplies across secondary copper smelters remained stable and that their production would remain normal in April. Most of them expressed concern about supplies when imports of Category Six materials are restricted from July. This is expected to impact secondary copper production from June.
Many smelters will undertake maintenance in April, and this is expected to sharply lower overall copper cathode production in China. Those smelters include Xinjiang Wuxin, Dongying Fangyuan, Guangxi Jinchuan, Yuguang Gold & Lead, Yanggu Xiangguang, Humon and Jinlong Copper.
Guangxi Nanguo this week will put 300,000 mt/year of capacity into operation, which is the second phase of a 600,000 mt/year copper project. Those new capacity is unlikely to yield output in April or help offset the production decline triggered by maintenance.
Output copper cathode in China is expected to fall 8.41% on the month and 6.76% on the year to stand at 687,900 mt in April. This will bring January-April production to 2.89 million mt, with a much smaller year-over-year increase of 1.35%.
