RE: Copper up to $8606 per tonne …31 Jan 2024 07:52
China copper smelters advised to cut output given tight raw material supplies
BEIJING, Jan 31 (Reuters) – China's Nonferrous Metals Industry Association (CNIA) said late on Monday it had advised copper smelters to cut production and postpone new projects amid tightening raw material supplies.
The world's top copper consumer has recently been hit by unexpectedly tight supplies of copper concentrate after the closure of a big copper mine in Panama, at a time when smelters were looking to expand output.
"Producers should take a proactive approach to bring maintenance ahead of schedule or extend the maintenance time, to cut production and to postpone the commencement of new projects," CNIA Vice Chairman Chen Xuesen said in a question and answer session posted online.
Chen was responding to a question from Jinchuan Group, one of the country's major metal producers, about the rapid fall of copper concentrate treatment charges and the association's guidance to the industry.
Top copper smelters proposed production cuts in a meeting held last Friday, but no specific plan was agreed, according to sources familiar with the situation.
China's refined copper output in 2023 hit a record high of 12.99 million metric tons, up 13.5% from 2022, data from the National Bureau of Statistics showed.
Output was expected to rise this year with a number of new projects coming online amid a bullish outlook for the metal, which is critical to the world's green transition.
Producers should be extremely cautious about expanding given the excessive capacity in the smelting industry, Chen said.
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