Wedoany.com Report-Sept. 8, JX Advanced Metals, one of Japan’s major copper producers, is planning to cut its electrolytic copper output in fiscal year 2025 by several tens of thousands of tonnes compared with earlier projections, according to a report citing company president Yoichi Hayashi. The company, which has an annual production capacity of 450,000 tonnes, will close its fiscal year in March 2026.

Japanese copper smelters are struggling with reduced TC/RCs due to limited concentrate supply and increased smelting capacity in China.

The decision comes amid reduced treatment and refining charges (TC/RCs) and shrinking margins faced by Japanese copper smelters. These challenges are linked to a limited supply of copper concentrate and growing smelting capacity in China. Reports also indicate that some Chinese smelters have agreed to process copper for Chilean miner Antofagasta without fees, intensifying competition.

Hayashi said: “In the short term, we plan to slash annual electrolytic copper output by several tens of thousands of tonnes from our earlier estimate as we can’t purchase concentrates under current conditions.” He added that the company intends to review its smelting capacity to reduce risks related to concentrate procurement and operations, though he did not specify the scale of the cutback.

About half of JX Advanced Metals’ refined copper is exported, with China being a major destination. However, demand could ease as new Chinese smelters come online. Mitsubishi Materials is also considering reductions, reflecting the broader pressure in the sector. Despite the cuts, Hayashi highlighted the continuing importance of smelting for rare metal recovery, such as tantalum, which is essential for semiconductor materials. “We are reviewing the optimal scale from various perspectives, including the use of recycling materials,” he said.

Negotiations between Japanese smelters and global miners ended without a TC/RC agreement, leading companies to avoid contracted term supplies. Industry sources noted that some miners remain open to separate negotiations with Japanese smelters, offering potential flexibility outside of Chinese benchmark deals.

In line with its strategic shift, JX Advanced Metals is increasing focus on semiconductor materials. In June, it announced plans to acquire a stake in the Copi mineral sands project in Australia, led by RZ Resources, to secure rare metals for chip production. Hayashi commented: “We are actively seeking new projects,” while noting that upcoming investments would be smaller than the company’s earlier venture in a Chilean copper mine, which resulted in impairment losses.

Since its stock exchange debut in March, JX Advanced Metals has been working to enhance investor communication and decision-making. The company recently raised its annual profit forecast, with Hayashi expressing confidence in achieving its 2027 financial targets, which include an operating profit margin between 12% and 17%. Looking further ahead, JX has set a long-term goal of expanding operating profit to $1.7 billion (¥251.9 billion) by 2040.