China’s copper output falls from peak with overcapacity in focus

Chinese copper production fell last month — retreating from a record high in June — as the government ramped up its campaign against industrial overcapacity.

Refined copper output dropped to 1.27 million tons in July, down from 1.3 million tons the previous month, China’s statistics bureau said on Tuesday.

The data mark a potential turning point for the country’s copper smelters, which had posted a succession of record production figures this year despite a tightening feedstock market. Beijing has been making more forceful efforts to tackle excess output and gluts across a range of sectors from steel to solar.

The copper industry has been granted more leniency due to its strategic role in high-tech and clean energy manufacturing, but smelters are still grappling with economic pressures. The spot treatment charges to process ore into metal are still well below zero, squeezing margins for smelters and pushing some to the brink of closing down.

Copper rose 0.1% to $9,745 a ton on the London Metal Exchange, while aluminum dropped 0.7% and nickel fell 0.3%.

(By Jessica Zhou)