Chinese Copper Smelters Consider Production Cuts Amid Feedstock Shortages

Chinese copper smelters may cut production or extend maintenance periods next year to address ongoing feedstock shortages, as discussed by participants at an industry conference in Shanghai. The shortage of copper concentrate is leading to increased competition among smelters, with production cutbacks seen as a possible solution to alleviate the situation.

Earlier this year, global mine outages and a rapid expansion of smelter capacity created intense competition for copper concentrate, resulting in a sharp decline in processing rates to historic lows. According to Zuo Haoen, an analyst at Minmetals Nonferrous Metals Company, Chinese copper smelting capacity is expected to grow by approximately one million tonnes in 2025, with utilization rates likely dropping to 75% or even lower, posing a potential destabilizing factor for the market.

Earlier projections by Minmetals anticipated an increase in China's copper concentrate consumption by 600,000 tonnes in 2024. However, this figure has since been revised downwards to 300,000 tonnes, reflecting the ongoing supply challenges.

Francisco Acuña, a consultant at CRU, noted that the global mining industry will need around US$120 billion to meet the rising copper demand by 2030, indicating the scale of investment required to sustain copper supply and consumption needs.