China's major copper smelters said they will cut production by 10 percent in the latter half of the year if the fees they're paid don't allow them to break even.

Head of China Smeltery Purchase Team (CSPT) Yang Jun told Xinhua on Tuesday that the move is to protest against the low fees offered by overseas suppliers.

The eight smelters under CSPT demand that the treatment charge and refining charge of spot imported copper concentrates should not be lower than 100 U.S. dollars per ton and 10 U.S. cents per pound respectively.

They also urge the Ministry of Commerce not to issue import permits for contracts with a prices lower than their demanded fees.

Processing charges, referring to the fees paid by copper concentrate suppliers to smelters, are the main source of smelters' profits. The reduction of processing charges means the price of copper concentrate will rise.

Wei Jianghong, deputy chairman of the China Nonferrous Metal Association, said in contrast to the sharp rise in international copper prices this year, which currently hovers around above 7,000 U.S. dollars per ton, the processing charge has declined.

He accused overseas copper concentrate suppliers of manipulating the market and profiteering.

According to Zou Shaolu, chairman of Yunnan Copper Group, the treatment charge and the refining charge should now be above 90 dollars per ton and 9.0 cents per pound respectively if Chinese copper smelters can break even.

He added the smelters would suffer a loss of over 2,000 yuan (250 dollars) on every ton of electrolytic copper at the current fees which are 60 dollars for treatment and 6.0 cents for refining.

China's copper concentrate import volume fell 5.3 percent in the first four months of this year, while the domestic output increased 18.31 percent.

Zou predicts that China's total import this year will be less than that of last year.

The eight CSPT members are Yunnan Copper Group, Jiangxi Copper Group, Tongling Nonferrous Metals Group, Jinchuan Group, Daye Nonferrous Metals Company, Zhongtiaoshan Nonferrous Metals Group, Baiyin Nonferrous Metals Company, and Yantai Penghui Copper Company.

Last year, their combined output of electrolytic copper amounted to 1.697 million tons, accounting for 66.7 percent of the nation's total, and their copper concentrate import came to 3.14 million tons, making up 77.5 percent of the country's total.

Source: Xinhua