Pan Pacific Copper to Optimize 3 Copper Operations

Japanese largest copper smelter, Pan Pacific Copper focuses the production cut into Hitachi plant in Ibaraki while the firm keeps full capacity operation at Saganoseki plant in Oita and Tamano plant in Okayama to meet strong demand for export. The firm plans 7% production cut in fiscal 2010 started April due to shortage of copper ore. The firm tries to optimize the operation for better profitability.

The firm makes crude copper from copper ore at Saganoseki and with the crude copper, the firm makes electrolytic copper at Saganoseki and Hitachi. The firm plans to make 202,300 tonnes in first half of fiscal 2010. The 64% controlling Tamano plant plans to make 89,300 tonnes of copper. Pan Pacific Copper’s total output will be 291,600 tones in the first half.

The firm suffers from ore shortage under worldwide tight supply when Chinese smelters increase the consumption. The higher ore price also hits copper smelters’ profitability. With the ore price, the smelters’ margin is around US$ 263 per tonne while their breakeven point is around US$ 600. Pan Pacific Copper reduces the ore purchase for better raw materials mix.

The firm tries to keep full capacity operation at Saganoseki and Tamano plants to meet strong demand from China. The firm reduces the output at Hitachi when Japanese copper demand recovered more than 80% level of the peak but the construction demand is still very low.