Singapore 23/03/2016 - China’s Jiangxi Copper Co is targeting copper cathode production of 1.175 million tonnes this year, down 83,500 tonnes or 6.6 percent from 2015’s output, the Hong Kong-listed firm said in its annual report on Wednesday.
The company, however, noted that it could change its 2016 production plans depending on market conditions.
Jiangxi Copper was among ten Chinese smelters who agreed at the start of December to cut its copper cathode output by a combined 350,000 tonnes in 2016 to prop up prices.
While Jiangxi Copper has not yet formally announced the volume it will cut under this agreement, a source had told FastMarkets in February that it will be at least 100,000 tonnes.
Some market participants had casted doubts on whether the smelters would abide by the agreement especially after domestic copper prices rebounded by 16 percent since late November last year.
But a Tongling Nonferrous Metals Group official recently affirmed that the 350,000 tonnes cut will be realised this year, though he added China’s overall copper production may not fall as other smelters outside of the ten could make up for the shortfall.
In 2015, Jiangxi Copper’s copper cathode production had risen by around 4.9 percent or 58,500 tonnes to 1.259 million tonnes. The increase comes despite production cuts at its Guixi smelter late last year.
The company also said it will aim to produce 207,000 tonnes of copper contained in copper concentrate, one million tonnes of copper rod, wire and other processed copper products this year.
In 2015, it produced 209,000 tonnes of copper in copper concentrates – unchanged from 2014 - and 950,000 tonnes of various copper products, which was 90,000 tonnes more than that produced in the previous year.
Jiangxi Copper’s net profit attributable to shareholders had fallen 76.2 percent to 689.56 million yuan ($106 million) last year.
It had warned in January that it will post a substantial drop in net profit due to a significant decline in the selling prices of company products including copper and gold.
Weaker consumption and stronger supply are bound to suppress the copper price, as both the domestic and international economic environment become more complex and rough this year, the company added.
It will also aim to produce 25 tonnes of gold and 530 tonnes of silver in 2016. This compared with output of 26 tonnes of gold and 571 tonnes of silver last year.