* Japan top copper smelter says to keep curbing output
* Other smelters may follow suit as demand remains in slump
* Chinese buying up, strength of demand uncertain (Recasts, adds comments)
TOKYO, March 4 (Reuters) - Japan’s top copper smelter will keep curbing its output of the metal from April, and sources said other domestic producers are almost certain to follow suit, highlighting the depths to which demand has plunged.
The global financial crisis has hit demand for copper, which is widely applied in industries ranging from computers to power plants, and its use is often seen as a measure of economic activity.
Pan Pacific Copper Co Ltd, the copper smelting unit of Nippon Mining & Metals Co Ltd, said it will continue to cut copper output by 10 percent for the full business year starting in April due to a sharp decline in demand amid the economic slump.
“We are still working on our budget for the next fiscal year, but our policy is to continue to produce 10 percent less (than capacity),” said Yuji Narazaki, a spokesman with the parent company.
Japan’s copper exports hit an all-time high of close to 60,000 tonnes in January, but the bulk of that went to China and industry officials say Chinese demand is volatile and cannot be relied on to help reignite Japan’s metal production. [ID:nT6354]
Pan Pacific, which has an annual output capacity of about 600,000 tonnes for copper began cutting runs in January.
Sumitomo Metal Mining Co Ltd 5713.T and Mitsubishi Materials Corp 5711.T, the second- and third-largest Japanese copper smelters, said they would announce their production plans for the year from April late this month or early next month.
A Japanese industry source noted, however, that domestic smelters faced the same dismal business conditions that saw January copper product output sliding to a 33-year low in an increasingly steep decline from late last year. [ID:n370874]
“The situation is no different for the other smelters,” the source said.
WHITHER CHINA DEMAND?
Industry sources say it will take another few months for domestic demand to pick up, although their views varied on the timing. The first source said Pan Pacific could hike output once it sees a sufficient return in demand.
“It’s not as though the decision to curb output is carved in stone,” he said.
Narazaki said there has been some overseas demand for copper, particularly from China, but this has not been enough to make up for the sharp decline in domestic demand.
A little over 400,000 tonnes of the copper Pan Pacific produces is supplied to domestic consumers, while the remainder is exported.
China is a key export market for Pan Pacific’s copper metal, but the percentage of the metal it supplies to the country varies, Narazaki said.
The industry source said Japan’s copper exports in January topped the 1974 all-time high of 47,000 tonnes. Over 80 percent of Japan’s copper exports in January went to China, government data showed.
He warned that it was unclear how much of China’s buying was due to real demand, and how much was speculative or meant for stockpiling. [ID:nHKG128327] [ID:nSP396273] (Editing by Hugh Lawson)
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