Jiangxi Copper, China’s largest producer, said it expects prices to rise in the second half once the Federal Reserve cuts interest rates, while pledging to maintain double-digit growth in output despite calls to rein in production.

Chinese smelters, including Jiangxi, said earlier this month they would control capacity in response to a tightening in global concentrate supplies following a slew of cutbacks at major mines. That has pushed the industry into cut-throat competition as processing fees on the spot market have fallen to near nothing.

Still, shrinking margins haven’t deterred Jiangxi, which plans to increase refined copper output this year by 11% to 2.32 million tons, according to its earnings report on Wednesday. It follows a 14% increase in 2023, although the smelter said the target could be adjusted based on market conditions, while flagging the likelihood of production cuts at some of its peers who rely more on the spot market.

China’s smelters are meeting again in Shanghai on Thursday to discuss the market outlook and possible output cuts.

COPPER’S RALLY
Copper rallied to an 11-month high earlier this month after investors honed in on the supply risks at mines and smelters, and a general improvement in sentiment toward global manufacturing activities. Prices are expected to trade in a narrow range in the first half, Jiangxi said, before breaking higher as US monetary policy eases.

The copper market should remain in a tight balance this year, it said, as supply constricts and consumption increases steadily, led by renewable energy demand.

There are no signs so far of large-scale production cuts in China’s smelting industry, the world’s largest. Term fees for concentrate are still profitable, while provincial governments need to meet China’s ambitious growth goals and aren’t keen on shrinking the contribution from local industries.

Copper rose 0.4% to $8,881 a ton on the London Metal Exchange as of 10:47 a.m. in Shanghai. Prices hit $9,164.50 on March 18, the highest since last April.