China's seven largest copper producers said on Monday they will cut imports of copper concentrate by 15 percent and output of copper cathode by a smaller amount, the latest sign that the government's economic cooling measures may be working.
The seven smelters, members of the China Smelters Purchase Team, account for around 80 percent of China's total copper concentrate imports.
China's domestic copper purchasing has been hit by Beijing's credit tightening in late April, part of the government's efforts to slow a red-hot economy that grew 9.8 percent in the first quarter from the same period a year ago.
The smelters' imports previously fell by about 10 percent in the January-April period, when China imported 790,956 tonnes of copper concentrate, down 8.4 percent from the same period last year, an official for the team said.
To offset the cut in imports, the Team would use more copper scrap as an alternative raw material, an official said.
"It's hard to say how much the reduction [in copper production] will be, but it won't be a lot," the official said. Although the Team said term and spot imports would be cut 15 percent, it did not provide the exact tonnage of how much that would be. It also did not say how much cathode its members would produce.
Due to heavy speculation on the Shanghai Futures Exchange, domestic copper prices did not reflect strong local demand for the metal, the China Smelters Purchase Team said.
Low domestic metal prices, coupled with low treatment and refining charges (TC/RCs) for copper concentrate, had led member smelters to trim imports, the Team said.
TC/RCs are the fees paid by sellers to smelters for processing concentrate into copper metal.
Daye Nonferrous Metals Co, Baiyin Nonferrous and Zhongtiaoshan Nonferrous planned to cut production of copper cathode this year as a result of the expected import cuts, the Team said.
The other members of the Team are Jiangxi Copper, Tongling Nonferrous Metals Group, Yunnan Copper and Jinchuan Nonferrous.
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