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Higher sulphuric acid prices, up almost 200% on a year ago, to 1500 yuan per tonne, provided a big boost to China's largest integrated copper producer. Revenues contributed by sulphuric acid, a by-product of copper smelting, amounted to 1.66billion yuan in H1, a 521% increase year-on-year. Jiangxi Copper posted H1 net profit of 2.77billion yuan, an increase of 32% on the same period in 2007. The company expects demand for its products to slow in the second half of the year with global economic growth struggling to gain momentum. However, Jiangxi remain confident that copper prices will stay high as a result of, "the shortage of copper concentrates supply around the world and the downgrade of copper concentrates." Factors expected to put pressure on Jiangxi's profit margin over the second half of the year include falling smelter processing fees, as a result of global over-capacity and tight supply of concentrates, and a cut in output of semi-finished products due to China's ongoing power shortages.

Survey of 24 major copper smelteries in China conducted by Ieforex shows that 90 percent of copper smelting enterprises in China are not optimistic about the future copper market, and are waiting for financial environment going stable.

It was reported that Chinese fabricators may buy less copper than normal ahead of the Lunar New Year due to high prices and tight credit. According to a trader at a large copper smelter, fabricators pre-holiday purchases have not been as good as in previous years as they are discouraged by high copper prices. With the spot market closed during the holiday period, fabricators usually build stock before in order to fully or partially maintain manufacturing operations. In addition, merchants have not received credit from banks, and therefore this limits their purchasing strength.

Chinese Xiangguang copper smelter has announced the completion of its 400,000t/y refined copper project in Shandong Province. The project was undertaken in two stages, with the first having started in 2005. The company expects that future capacity may reach as much as 600,000t/y.

Key issues for 2020: supply disruptions, water shortages - less complex concentrates - smelter closures - industry consolidation - range-bound market - tight markets for scrap and blister - depressed acid prices.

I've heard the same signal from Europe: tightening scrap market, with problems to be expected in May - July. This issue will affect Europe more than other geographies because of our increased dependence on scrap both in primary and secondary smelters.