Biggest copper smelters in China have run into complications due to a shortage of raw material from miners and a decrease in copper processing fees which prompted talks of supply cuts.
According to Reuters, Chinese top producers Jiangxi Copper, Tongling Nonferrous Metals Group, Jinchuan Group and China Copper among others came to an agreement to jointly embark on production cuts at some loss-making plants.
The move comes in the wake of rapid expansion of copper processing capacity in China over the past year to take advantage of an expected surge in demand from green energy sectors. But several mine disruptions globally have led to a decrease in copper concentrate supply.
Meanwhile, the price of copper concentrate on the spot market has dropped to its lowest in more than a decade, leading to a decrease in processing fees paid to smelters. Spot copper treatment charges in China tumbled to $11.20 per metric ton, down 76% in just two months. It is the lowest level since 2013 when agencies began publishing this data.
China’s refined copper production, which accounts for about half of the world’s total, amounted to 2.215 million tons in the first two months of 2024, or about 37,000 tons a day, up 11% from a year ago.
Imports of copper concentrate to China amounted to 4.66 million tons for the first two months of the year, up 0.6% compared to the same period a year earlier, customs data showed.
Theodor Lisovoy, Editor in Chief of the European bureau, Rough&Polished
