China's leading metals producer halts copper smelting capacity due to fatal accident

China's leading precious metals producer Shandong Humon Smelting suspended copper smelting at its plant due to a fatal production accident in the furnace, the company said in an Aug. 13 statement.

Shandong Humon's No. 1 plant has stopped production for rectification purposes after the accident, the company said. As a result, a production line with 100,000-metric ton copper capacity has been stopped after the accident, market sources said.

There would be a limited impact to spot copper processing charges from Shandong Humon, according to sources.

Shandong's provincial government has set up an investigation team to probe the accident. The plant will resume production after the investigation concludes and any required changes are completed, Shandong Humon said.

Shandong Humon has produced 203,000 metric tons of copper cathode in 2023, up 1.41% from a year earlier, according to its annual report.

Shandong Humon has gold, silver, copper and sulfuric acid production capacity of 98.33 metric tons, 1000 metric tons, 250,000 metric tons and 1.3 MMt/year, according to its annual report.

China's top copper smelter Jiangxi Copper acquired a stake in Shandong Humon in 2019 and currently owns 44.48% stake in the company.

Limited impact to spot market

The market expected limited impact to spot TCs/RCs from Shandong Humon production suspension due to relatively tight copper concentrates supply.

A supplier has not yet received notice from Shandong Humon to delay shipment, and a smelter source estimated "Humon may prefer to accumulate stocks in the short run instead of cargo cancellation."

"As the gold and copper producer, Humon uses more of high gold content copper concs in production, which may not suitable to the other smelters," another source explained.

But high gold content materials received less popularity in recent months due to elevated gold prices and interest rate.

"Those cargoes diverted from Humon may get squeezed if being offered around in the future," a smelter said.

Platts assessed CIF China clean copper concentrate treatment and refining charges at $5/t and 0.5 cent/lb, respectively, Aug. 12, up 70 cents/t and 0.07 cent/lb, respectively, from Aug. 8, Commodity Insights data showed