China Copper-Prices Seen Boosting Smelter Output

Most of China's key copper smelters are planning to churn out more refined metal in 2002 and some are gearing up for expansion as world prices rebound.

"The Chinese market, including smelters, is generally positive about copper prices this year," said David Feng, deputy director of Weifeng Investment Research Center in Shanghai.

Analysts said China's scores of smelters were likely to produce 1.4-1.6 million metric tons this year, from 1.425 million last year, depending on how strongly the Chinese economy grew.

Analysts expect firms like Jiangxi Copper and Daye Non-ferrous to easily exceed their 2002 targets, which stand at 218,000 metric tons and 130,000 metric tons, respectively despite cutback plans announced last year.

The two smelters, together with Yunnan Copper and Tongling Non-ferrous, said late last year they were planning to trim output by a combined 100,000 metric tons this year after prices fell below $1,500.

Most smelters are able to break even at around $1,500, analysts said.

"Jiangxi Copper will be undergoing maintenance for one or two months this year and that is when the output cuts will happen," said an analyst at Beijing Antaike Information Centre.

"But it actually has no problems obtaining an output exceeding its target for this year if the maintenance shutdown doesn't drag for too long," he said.

China is expected to remain active in copper concentrate buying, with import growth likely to match last year's 24.3 percent. In 2001 imports hit 2.26 million tonnes, custom figures showed.

Smelter expansions such as Jiangxi Copper's move to increase smelting capacity to 350,000 metric tons this year from around 200,000 metric tons are also likely to go according to plan, analysts said. Jiangxi Copper was unavailable for comment. Reuters