Close Menu
  • Homepage
  • Local News
  • India
  • World
  • Politics
  • Sports
  • Finance
  • Entertainment
  • Business
  • Technology
  • Health
  • Lifestyle
Facebook X (Twitter) Instagram
  • Contact
  • Privacy Policy
  • Terms & Conditions
  • DMCA
Facebook X (Twitter) Instagram Pinterest
JHB NewsJHB News
  • Local
  • India
  • World
  • Politics
  • Sports
  • Finance
  • Entertainment
Let’s Fight Corruption
JHB NewsJHB News
Home»Finance»Chinese copper smelters grapple with margin collapse
Finance

Chinese copper smelters grapple with margin collapse

March 22, 2025No Comments4 Mins Read
Facebook Twitter Pinterest LinkedIn Tumblr Email
Reuters
Share
Facebook Twitter LinkedIn Pinterest Email

By Amy Lv and Lewis Jackson

BEIJING (Reuters) – Main copper smelters throughout prime client China have kicked off gear upkeep in March, historically a peak demand interval, in a bid to stem losses from a worsening feedstock scarcity that’s hammering margins, business insiders stated.

Shutting down vegetation in what’s historically one of many busiest instances of the 12 months highlights how a lot ache the shortage of copper focus is inflicting refiners, an issue compounded by smelting overcapacity that has sparked fierce competitors for the uncooked materials and despatched remedy charges under zero.

Roughly 980,000 metric tons of smelting capability, or 8% of China’s complete final 12 months, is about for upkeep in March, Hongyuan Futures stated in a observe. Three analysts and a smelter supervisor informed Reuters this was an unusually excessive quantity in comparison with earlier years.

Workers at three massive smelters confirmed to Reuters they started gear upkeep in March. One other operator, Tongling Nonferrous Metals Group, which accounted for 13.5% of China’s refined copper output in 2023, began month-long upkeep on some smelting gear in early March, in accordance with two sources.

Manufacturing cuts could be delicate in China, the place many smelters are essential contributors to regional economies, however as in lots of industries, from metal to grease refining, the sector is tormented by overcapacity as operators chase market share.

The overcapacity in China, the world’s largest provider of the refined metallic utilized in wiring, equipment and new vitality applied sciences, is contributing to a world imbalance within the copper smelting business.

By shutting gear for upkeep, smelters hope to chop consumption of copper focus, ease the focus shortfall and cease processing charges from sliding even additional, analysts stated.

Eight analysts and smelters who spoke to did so on situation of anonymity given they aren’t authorised to talk to media.

Tongling didn’t reply to Reuters’ request for remark.

The business’s difficulties put a highlight on the March 31 quarterly assembly of the China Smelters Buy Workforce (CSPT), the place measures together with manufacturing cuts are set to be mentioned, sources with data of the matter stated.

“There’s a important danger of large-scale output cuts amongst Chinese language smelters this 12 months,” stated Patricia Barreto, senior analyst at S&P International Commodity Insights.

If Chinese language smelters collectively agree a manufacturing minimize, refined copper output this 12 months will doubtless fall, which may lead China to import extra, analysts stated.

UNUSUAL TIMING

Widespread upkeep is uncommon in March, when smelters traditionally profit from a surge in demand after the Lunar New Yr vacation earlier than present process upkeep in April or Could.

Provide of copper focus has been tight since late 2023 attributable to disruptions at main mines together with First Quantum’s Cobre mine in Panama in addition to smelter capability growth.

That overcapacity, which continues to develop, is rising demand for globally scarce focus.

Analysts at Antaike and Shanghai Metals Market have lowered forecasts for copper focus output progress this 12 months attributable to downward revisions from producers, in accordance with analysis notes from Citi.

Some smelters are working at a loss, and never simply in China.

Glencore’s Pasar smelter within the Philippines was placed on care and upkeep in February. Japan’s smelters, whereas bunkering down for powerful instances, could fare higher as they’re extra diversified than China’s and have long-term provide contracts.

Remedy and refining costs (TC/RCs), a key income supply, have been unfavorable since December 20, that means smelters should pay miners or merchants to show focus into refined metallic, as an alternative of the opposite means round.

Fastmarkets copper concentrates TC/RC index plunged to a file low of -$26.5 per ton and -2.65 cents per pound on March 7.

“The scenario is far harder this 12 months, as final 12 months smelters may make some cash thanks to raised costs for the long-term contract, however you’re struggling losses in no matter scenario proper now,” stated a supervisor at a Chinese language smelter.

“The one distinction is whether or not you’re shedding extra money or much less cash,” the supervisor added, saying losses have been as a lot as 3,000 yuan ($414.47) per ton of refined copper for spot cargoes.

4 analysts estimated losses at between 1,000 yuan and a pair of,000 yuan per ton.

(Reporting by Amy Lv and Lewis Jackson in Beijing; Further reporting by Violet Li in Shanghai, Melanie Burton in Melbourne, Yuka Obayashi in Tokyo and Eric Onstad in London. Enhancing by Tony Munroe and Shri Navaratnam)

Source link

Chinese collapse copper grapple margin smelters
Share. Facebook Twitter Pinterest LinkedIn Tumblr Email

Related Posts

U.S.-China talks ‘stalled’ and need Trump and Xi to weigh in, Bessent says

May 30, 2025

Taiwan Semiconductor Manufacturing Company Limited (TSM) Slid due to Broader Market Correction

May 30, 2025

BMO’s Q2 earnings show no improvement in credit conditions for trucking

May 30, 2025

Factors that Powered HCI Group’s (HCI) Performance in Q1

May 30, 2025
Add A Comment
Leave A Reply Cancel Reply

Editors Picks

U.S.-China talks ‘stalled’ and need Trump and Xi to weigh in, Bessent says

May 30, 2025

No order to cover ‘Manipur’ on bus, Chief Secretary says panel will inquire | India News

May 30, 2025

What is diabetic rice?

May 30, 2025

IPL Qualifier I: Red-hot RCB fire their way into fourth final | Ipl News

May 30, 2025
Popular Post

Microsoft changes tune about CMA following Activision deal

Crypto exchange Bittrex files for bankruptcy after SEC complaint

Can I Use My RMDs to Transfer Money Into My Roth IRA?

Subscribe to Updates

Get the latest news from JHB News about Bangalore, Worlds, Entertainment and more.

JHB News
Facebook X (Twitter) Instagram Pinterest
  • Contact
  • Privacy Policy
  • Terms & Conditions
  • DMCA
© 2025 Jhb.news - All rights reserved.

Type above and press Enter to search. Press Esc to cancel.