China’s copper smelters to discuss production cut as fees slump

At least 15 smelters were invited to the meeting hosted by the China Nonferrous Metals Industry Association, said people familiar with the matter, who asked not to be identified as they aren’t authorized to speak publicly.
The fees that companies receive to turn concentrate into refined metal, so-called treatment charges, have slumped to a record low in data going back to 2013. They dropped to single digits in 2010 after the global financ

ial crisis forced miners to curtail operations, according to Wood Mackenzie Ltd.

Smelters compete to treat concentrate but overseas mine disruptions are curbing supply, forcing them to drop their fees. The situation is made worse by overcapacity in China, home to the world’s largest processing industry, where smelters have expanded relentlessly to meet demand from economic growth and the energy transition.

Senior executives from the smelters are set to discuss a joint production cut, but it may be difficult for all the plants to agree on such a plan, the people said. The industry association declined to comment. Shanghai Metals Market reported the meeting earlier.

The president of Tongling Nonferrous Metals Group Holdings Co., one of the top producers, said this week that his company is not planning output cuts or changes in maintenance schedules. The company expects copper demand to grow from emerging industries such as electric vehicles and other new-energy sectors.