(July 20 Bloomberg)
China`s copper smelters may cut production on costs
Chinese copper smelters including Jiangxi Copper Co and Tongling Nonferrous Metal Co may cut production in the second half of the year because they can`t cover the cost of buying and processing imported raw material.
Officials from nine smelters discussed output reductions of between 10% and 15% at a meeting in Shanghai last weekend, according to executives from two of the companies who asked not to be identified because the talks were confidential.
Larger cuts are possible, they said.
A reduction in refined copper output may force the country, the world`s biggest consumer of the metal, to increase imports as demand from the power and construction industries buoys prices.
Chinese imports helped boost international copper prices by 27% this year.
Smelters have previously considered reductions but not implemented them.
Non-Chinese mining companies this year cut contract fees paid to smelters for processing copper concentrate, the main raw material for the metal used in wires and pipes.
They also scrapped clauses allowing smelters to benefit from copper price gains.
The fees for this year were cut by 37%, according to Beijing`s Antaike Information Development Co.
(July 20 Bloomberg)
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