China plans to limit domestic production of non-ferrous metals, such as widely used copper, by 2015 according to the vice president of the China Non Ferrous Metals Association, via China Securities Journal.
Annual ‘apparent’ consumption of copper, lead, zinc and aluminium may be 43.8 million tons by 2015, the newspaper reported, citing the nonferrous metals association. Consumption of copper may be 8.3 million tons, the newspaper reported. Lead consumption may be 5 million tons, zinc may be 6.5 million tons and aluminium may be 24 million tons, the newspaper reported.
This is part of China’s push to limit over-capacity, and exists alongside efforts to limit future steel and the production of rare-earths used for things such as batteries. Any limits on production will ultimately benefit the stronger existing players in the commodities production space. This is because production limits will prevent new entrants from entering or expanding within the industry. Efforts to shut down small, high cost players will also limit the long-term supply growth for commodities as well.