April 27, 2012 / 8:39 AM / 8 years ago

Doubts on China plan to cut copper, lead production

* Research firm Antaike keeps 2012 copper, lead output target

* Jiangxi Copper upgrades smelter, expands capacity - spokesman

By Polly Yam

HONG KONG, April 27 (Reuters) - China’s plan to close inefficient copper and lead operations will not cut production this year with new capacity coming on stream, an influential research firm said on Friday, as the country’s top copper producer said it was expanding smelting.

China is the world’s top producer and consumer of refined lead and refined copper, but is trying to push industry consolidation to curb pollution and prevent energy waste.

A failure of Bejing’s latest plan to curb production will mean China is unlikely to need to raise imports of the metals.

The Ministry of Industry and Information Technology said on Thursday it planned to close thousands of tonnes of production capacity in base metals in 2012, with the largest volumes being on copper at 700,000 tonnes and lead at 1.15 million tonnes. .

“We are keeping our 2012 refined copper production forecast at 5.7 million tonnes,” said Yang Changhua, senior copper analyst at state-backed research firm Antaike.

A quarter of China’s 4.07 million tonnes of annual copper smelting capacity is currently idled due to a shortage of raw material, Yang estimated. He predicted about 600,000 tonnes of new smelting operations would come onstream this year.

For copper refining, about 27 percent of China’s 7.13 million tonnes of annual capacity was idled and would reopen if there was a domestic supply shortage, he added.

Yang said he believed the 700,000 tonnes China planned to close referred to combined smelting and refining.

Meanwhile, Jiangxi Copper Company Limited , the largest producer in China, will upgrade 50,000 tonnes of outdated copper smelting capacity in the western province of Sichuan, company spokesman Pan Qifang said, with capacity doubling when it is completed in 1-2 years.

In China, Jiangxi Copper currently operates one million tonnes of copper smelting capacity that uses concentrate and scrap as feed, including that 50,000 tonnes, Pan added.

It is common in China for smelters to get around orders to close operations by upgrading old capacity or building new facilities, said Hu Yongda, senior lead analyst at Antaike.

China is expected to add over 600,000 tonnes of lead capacity this year after it increased it by about the same amount last year, Hu said.

About a fifth, or 1.23 million tonnes of China’s 5.6 million tonnes of lead capacity, was idled due to a lack of raw material and environmental issues, Hu estimated. This included primary and recycled lead.

“Idle capacity would replace the operations being closed if the market is in a deficit,” said Hu, who has kept his refined lead production forecast at 4.6 million tonnes this year.

China had a similar plan to shut inefficient production in base metals in 2011, but it failed to cut output last year.

Editing by Ed Davies

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below