Copper enterprises cut production
(Xinhua)
Updated: 2006-10-06 09:15
Some of China's copper melting enterprises have begun to cut their production
in an effort to resist price hikes of imported raw materials, according to
sources from the copper industry.
A senior manager of a Chinese copper company said this move is in response to
BHP Billiton's cancel of price participation article (PP article) and suppress
of copper processing fees.
He said over the past more than 30 years, raw material suppliers and melting
companies have always pursued the PP article. But recently the BHP Billiton not
only largely suppressed the processing fees, but also unilaterally proposed to
cancel the PP article in a bid to solely enjoy the huge profits brought about by
copper price hikes.
"This is unprecedented in international negotiations, it is harmful to the
mutually-beneficial cooperation and friendship between suppliers and melting
companies, and is a malicious damage to long-term contract structure," he said.
Head of the China Smeltery Purchase Team (CSPT) Yang Jun said if there is no
PP article, what smelting enterprises get can not even meet their production
cost.
In a CSPT meeting held on September 26, the nine member enterprises all
demanded to raise processing fees to a reasonable level, he said. The nine
enterprises account for over 80 percent of China's imported copper raw
materials. (For more biz stories, please visit Industry Updates)
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