Mar 28, 2013 01:40 GMT Source: Reuters
Tags: refined copper output
HONG KONG, March 27 (Reuters) - China's top producer of refined copper, Jiangxi Copper Company Ltd, reported a jump of 16 percent in 2012 output, saying it plans to hike production further this year.
The company's output reflects a growing trend in China, the world's No.1 consumer and producer of refined copper, towards importing more raw material concentrate in its effort to cut reliance on world markets for its refined metal needs.
But further capacity growth by Jiangxi could be hit as China tightens controls over emissions.
Chairman Li Baomin said the firm's plan to build a 300,000-tonne-a-year plant in Yantai city in the northeastern province of Shandong was blocked by the city government because the city lacked sufficient emission quotas for the plant.
"We are working on (getting approval). The possible size that could be approved is 180,000 tonne," Li told reporters at a news conference in Hong Kong on Wednesday.
Emissions quotas are a growing obstacle to the construction of new smelters in China as Beijing battles air pollution.
The plant is planned jointly by parent company Jiangxi Copper Corporation and Yantai Penghui Copper.
Li, who also heads the parent, said it aimed to inject the plant into the listed arm in the future.
Jiangxi Copper reported output of 1.093 million tonnes of refined copper for 2012, or about 18 percent of China's production of 6.06 million tonnes last year.
The firm, which expects the global copper market to be largely in balance this year, wants to increase output by 2.5 percent this year, to 1.12 million tonnes, as it expects demand in China to grow and global copper prices to improve.
"The economy in the United States is recovering ... and China's demand from urbanization would rise. Copper prices should be better than last year," Wu Yuneng, deputy general manager of Jiangxi Copper, told the news conference.
China envisages shifting 400 million people to cities from the countryside over the next decade, as it executes its next phase of urban development.
Wu did not give a forecast for the average world copper price in 2013, citing analysts' figure of $8,057 per tonne.
Jiangxi Copper expects China's refined copper consumption to rise to 8.1 million tonnes this year, up 5 percent from about 7.7 million tonnes last year, Wu said.
The firm, however, expects competition from other producers to grow as smelters expand capacity in China.
China's smelting capacity is expected to rise a fifth to 5.59 million tonnes in 2013 from 4.67 million last year, while refining capacity may increase 17 percent to 9.76 million from 8.36 million, Jiangxi Copper estimated.
China's copper smelters plan to increase refined copper exports following a rule change last year that has cut export costs, making such trades more attractive.
The move could add to copper stocks in London Metal Exchange warehouses and weigh on global prices.
Benchmark three-month London Metal Exchange copper prices have dropped more than 3 percent so far this year, after gaining about 4 percent last year, and were trading at around $7,630 a tonne on Wednesday.
Jiangxi Copper's mines in China produced 210,000 tonnes of copper in 2012 and output is expected to be flat this year.
Annual production of semi-finished copper products rose 18.6 percent in 2012 to 582,100 tonnes and is expected to rise further to 845,000 tonnes this year as Jiangxi plans to expand annual capacity to 920,000 tonnes from 720,000 tonnes.
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