Copper production grows less than expected in Aug as smelters fail to recover from maintenance

SHANGHAI, Sep 10 (SMM) – Copper cathode production across China grew less than expected in August, as Baiyin Nonferrous Metals and Minmetals Copper failed to recover from maintenance and as tighter supplies of copper anodes affected production at some secondary copper smelters.

An SMM survey showed that China produced 767,700 mt of copper cathode last month, up 1.66% from July and 4.12% from August 2018. SMM had expected copper production to grow to 772,400 mt in August.

For the first eight months of 2019, output of copper cathode amounted to 5.8 million mt, rising 0.15% from the same period last year.

In August, blister copper refining charges fell to 1,100-1,300 yuan/mt on a deliver-to-factory basis for domestic materials, and $140-155/mt on a cif basis for seaborne materials, showed SMM assessments. This was far below levels seen in long-term contracts, and similar to cash costs for turning blister copper to copper cathode.

As it approaches to the October 1 National Day, concerns grow that copper smelter operations will be subdued by greater environmental pressure in the run-up to China’s 70th founding anniversary.

There has yet to be any smelters told SMM that they felt the impact, but smelters are concerned about potential transport controls. It would exert great pressure on some copper smelters, if authorities impose restrictions on sulphuric acid transportation.

Copper smelters, except for SDIC Jincheng Metallurgy and Hongyue North Copper, will recover from maintenance in September. This is likely to expand copper production to 782,300 mt for the month, with a year-over-year increase of 9.14%.

Production in January-September will likely grow 1.14% from a year ago to 6.58 million mt.

Jiangtong Fuye Heding Copper and Jinchuan Group have decided to postpone maintenance on their copper smelting facilities from the originally planned September to next year.