- Write by:
-
Thursday, March 28, 2024 - 22:39:55
-
121 Visit
-
Print
Chinese smelters, which produce over half the world’s supply of refined copper, moved a step closer to implementing a joint output cut after tightening ore supplies drove processing fees to near zero.
Thirteen major smelters proposed a reduction of 5% to 10% in planned output this year, according to people with knowledge of the matter, who asked not to be identified because the discussions are private. The proposal was made at the quarterly meeting of the Copper Smelters Purchasing Team, known as CSPT, in Shanghai on Thursday, the people said.
The proposal follows talks between smelters and the government earlier this month about possible production cuts and capacity controls, news of which helped send copper prices to an 11-month high on the London Metal Exchange. Smelters will now discuss the exact scope of individual cuts, said one of the people. Representatives from Jiangxi Copper Co. and Tongling Nonferrous Metals Group declined to comment.
Chinese smelters are at a critical juncture after so-called treatment and refining charges — the amount they are paid to convert ore concentrate into metal — collapsed to near zero levels on the spot market. The plunge has been driven by a slew of supply setbacks at global mines, coupled with relentless expansion in Chinese capacity that’s boosted competition.
BHP Group Ltd. sold cargoes of copper concentrates from its giant mine Escondida at treatment charges of as low as $3 a metric ton and refining charges of 0.3 cents a pound to at least one Chinese smelter in its latest offer, according to people familiar with the deals. That’s the lowest in at least a decade, one of the people said.
Doubts linger
Uncertainty surrounds whether the cuts will be fully implemented, said two of the people. Term fees for concentrate are still profitable, while provincial governments need to meet the country’s ambitious growth goals and are not keen on shrinking the contribution from local industries.
In a sign of the relentless growth of Chinese refined copper output, top smelter Jiangxi Copper said in an earnings release Wednesday that its production will rise 11% to 2.32 million tons this year, following a 14% increase in 2023. The target could be adjusted based on the market, while it flagged possible output cuts at some of its peers who rely more on the spot market.
At Thursday’s meeting, the smelters also left out the usual setting of so-called floor prices for treatment charges for the coming quarter, the people said, as the prices used to guide them in separate negotiations for concentrate supplies from miners are increasingly irrelevant after the plunge in spot fees.
Jiangxi Copper expects copper prices to rise in the second half once the Federal Reserve cuts interest rates. The market should remain in a tight balance this year, it said, as supply shrinks and consumption increases steadily, led by renewable energy demand.
Copper was up 0.3% at $8,873,50 a ton on the LME as of 3:28 p.m. local time. Prices hit $9,164.50 on March 18, the highest level since April last year.a
Short Link:
https://www.miningnews.ir/En/News/628184
![Copper price set for worst week since 2022 as China Plenum disappoints](/Incsys/Photo.aspx?image=/Uploads/News/20240723142415052.jpeg&width=236&height=180)
Copper prices have retreated from a record in May on concerns about the strength of demand in China, where growth was ...
![Zimbabwe’s Kuvimba signs $310 million lithium mine deal](/Incsys/Photo.aspx?image=/Uploads/News/20240723141944589.jpeg&width=236&height=180)
Zimbabwe’s state-owned Kuvimba Mining House has signed a $310 million deal with a consortium of British and Chinese ...
![Copper output from Codelco this year to top 2023, chairman says](/Incsys/Photo.aspx?image=/Uploads/News/20240723141842581.jpg&width=236&height=180)
Codelco chairman Maximo Pacheco said on Thursday that the state-run copper giant expects production this year to outdo ...
![China copper smelters eye more output cuts as raw material supply tightens](/Incsys/Photo.aspx?image=/Uploads/News/20240723141202374.jpeg&width=236&height=180)
A shortage of copper concentrate this year has forced a few smelters in China to cut output, and more curtailments could ...
![Mercedes, Stellantis in talks to back Serbia’s lithium plans](/Incsys/Photo.aspx?image=/Uploads/News/20240723140454191.jpg&width=236&height=180)
Mercedes-Benz Group AG and Stellantis NV are in discussions with Serbia’s government to invest in lithium-processing and ...
![China copper smelters plan to cut output after margins fall](/Incsys/Photo.aspx?image=/Uploads/News/20240723135544917.jpg&width=236&height=180)
Two Chinese copper smelters have laid out plans to reduce production next year as an imbalance between mine supply and ...
![Iron ore majors ramp up supply even as China faces challenges](/Incsys/Photo.aspx?image=/Uploads/News/20240723135340184.jpeg&width=236&height=180)
The world’s biggest iron ore producers are hurling plenty of dirt, adding tons of the steel-making commodity to the ...
![Copper price edges down to two-week low amid demand uncertainty](/Incsys/Photo.aspx?image=/Uploads/News/20240723135256664.jpeg&width=236&height=180)
Copper edged down to a two-week low in choppy trading, amid uncertainty over supply and demand in China and weakness in ...
![Antofagasta expects 2024 copper output at low end of yearly forecast](/Incsys/Photo.aspx?image=/Uploads/News/20240723135052294.jpg&width=236&height=180)
Chilean miner Antofagasta said on Wednesday it expects full-year copper output at the lower end of its 670,000 to ...
No comments have been posted yet ...