China to consume more copper concentrate in 1997

China is poised to become the world’s second-largest buyer of custom copper concentrate in 1997, according to a British-based metals consulting firm.

Brook Hunt reports that China is believed to have imported 800,000 tonnes of copper concentrate in 1996, an increase of 65% over 1995. The country is set to import an additional 200,000 tonnes of concentrate per year in order to feed the new Jinlong smelter-refinery complex. Should current concentrate import trends hold, China could end up buying up to 1 million tonnes of concentrate this year, settling behind front-runner Japan and edging out Germany.

China’s smelter production is expected to double by 2000, mainly through expansion. Conversely, the quality and quantity of China’s ore reserves are poor, with 21 operations containing fewer than 100,000 tonnes of reserves.

Many of the nation’s copper mines have been operating for up to 40 years, and 22 are expected to close in the foreseeable future.

However, expansions at several existing operations, plus the commissioning of several new, medium-sized mines, should lead to a modest increase in overall copper production.

Nevertheless, until those expansions and openings are complete, China will need to import an average of 30% more copper concentrate until 2000, by which time it will be buying 2.2 million tonnes per year from outside suppliers.

Worldwide treatment and refining charges in 1997, according to the report, will increase 11% over last year’s figures, to US$105 per tonne. Since world smelting capacity is expected to outpace world production by 2 to 1 in 1997, concentrate stocks are expected to fall.

Although concentrate stocks are forecast to fall this year, the impact will not affect custom smelters until mid-year when their own stocks begin to be depleted. Metal prices are also expected to fall during this period.

Roughly 880,000 tonnes of mine production and 350,000 tonnes of smelter capacity are scheduled to come on-stream before 2000. As a result, Brook Hunt says, falling copper metal prices will determine future treatment and refining charges.