China’s Jiangxi Copper Co. expects a global shortage of ore to extend into the second half, keeping downward pressure on processing fees.
The nation’s largest supplier of the refined metal said there’s “rising certainty” that mine supply constraints will remain, according to an exchange filing for the company’s earnings on Wednesday. Processing capacity continues to outstrip the availability of ore from mining operations, Jiangxi Copper said.
Chinese smelters produce more than half the world’s supply of refined copper, but setbacks at global mining operations and an increase in smelting capacity across Asia has squeezed supply. That’s led to plunging processing fees, which have have stayed below or near zero since April.
The nation’s refined copper output has fallen from a December record, but was higher over the first seven months year-on-year. Production from scrap metal and blister supply from overseas partially filled the gap.
Refined copper output from Jiangxi Copper — which is also a miner — rose 19% to 1.18 million tons in the first half. Net income climbed to 3.6 billion yuan ($505 million), due to higher copper prices, which hit a record in May.
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