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China's 9 largest copper smelter reached a consensus that if the situation deteriorated, they may reduce production.

2016/8/10 17:04:59

According to foreign media on Saturday (December 19) quoted the China a large copper smelting business executives, including nine large copper smelters have agreed, if copper prices and profitability  deteriorate, they may reduce the scheduled next year's production scale to more than 35 million tons.

The meeting in Shanghai was held on Saturday. They discussed refining and metals markets, and assessed a reduction in production since the end of November.

The smelting providers are members of copper raw materials in China joint negotiating team (cspt), and most of them are state-owned enterprises, such as Jiangxi copper, Tongling Nonferrous Metals and Jinchuan Group.

The executives said that these smelters have agreed that the original 35 million tons of production scale will be the lowest level. If a further decline in copper prices and spot refined processing imported refining cost (TC / RC) lower than the cost of smelting business, they may expand the scale of production.

"We all agree that we do not do no profit business," he said. "Our production level will depend on the profitability."

Now these copper smelters are responding to the requirements of the central government to solve the problem of excess copper supply pressure. Previously part of the smelting business resist reducing production, because local governments want to achieve higher economic growth rate, but now these smelters are willing to shut down those that do not meet environmental standards or high cost of production capacity, the executive said.

However, the executive did not specify the prices at which level may lead smelting business to expand the refined copper production scale, nor refers to goods of TC / RC is higher than the cost of smelting business to reach at least what level.

The executives said that smelters agreed, Jiangxi copper and the Chile miner Antofagasta (Antofagasta) TC / RC prices this week, per ton 97.35 dollars and per pound 9.735 cnets should become the indicators of 2016 Chinese imports of copper.

Industry people have said that if the TC/RC is higher than 90 U.S. dollars per ton and 9 cents per pound, then many Chinese smelting companies should be able to make profit.