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NMIA: Strictly Control Newly Added Copper Production Capacity

Recently, Jia Mingxing, Vice President & Secretary-general and spokesperson of the China Nonferrous Metals Industry Association, expressed his views on the current copper industry and copper market.

Jia Mingxing said, within a considerably long period of time, copper remains the biggest metal variety in the nonferrous metals industry. Since copper has relatively high value, copper plays a guiding role for the market among all nonferrous metals varieties, and is the most conspicuous in terms of changes of price cycle. He said, currently copper price is around 36000 yuan/tonne, since 2002, in a big surging wave, many overseas institutions made studies and developed the view that China’s economic development created huge demand for copper. Therefore, this wave of consumption price is underpinned by China’s increment for copper consumption which is supporting international copper price. Back then copper price was at 20000 yuan/tonne, and soon it would rise to 30000 yuan/tonne. Afterwards, after copper price rose, the highest wave arrived, copper price reached 80000 yuan/tonne. Judging from the current price, compared with the time when copper price was at its highest level, copper price declined considerably in this round of trading. Consequently, the current copper price cannot be considered as at low level, nor is it at high level.

According to Jia Mingxing, the current copper price is within reasonable range. But for Chinese copper smelting enterprises, currently the biggest problem they have to face is copper processing fee. This is because in 2015 copper price was relatively low, copper price dropped from high to low, therefore copper processing fee was higher than western countries, this is a factor that restrains copper smelting enterprises greatly at the current stage. He said, copper smelting enterprises must strengthen self discipline, and cannot single-mindedly keep down prices like vicious competition in the past.

Jia Mingxing also told the journalist that China’s economic development created huge increment of demand for aluminum, so is the demand for copper. China lacks copper, most of China’s imported copper is used up. therefore, currently there is still no surplus of copper, because China’s copper demand increment is very large. He said, currently, comparatively speaking, China’s copper enterprises fare better than aluminum enterprises, some enterprises can earn profit. Nevertheless, copper enterprises also have very big risk, namely newly added capacity. He emphasized that it is absolutely necessary to restrict newly added copper capacity. He said, if enterprises immediately develop new capacity when seeing there is profit, just like in the past, in the end it will follow the precedent of aluminum, and create surplus. Therefore, the China Nonferrous Metals Industry Association clearly told to the copper smelting industry that, it is necessary to control newly added capacity, meanwhile it is also necessary to improve smelting and processing standard, improve technological added value, technology content and copper’s application.