• 4 minutes Tariffs to derail $83.7 Billion Chinese Investment in West Virginia
  • 9 minutes Battle for Oil Port: East Libya Forces In Full Control At Ras Lanuf
  • 17 minutes Kaplan Says Rising Oil Prices Won't Hurt US Economy
  • 5 hours Battle for Oil Port: East Libya Forces In Full Control At Ras Lanuf
  • 10 hours Corruption On The Top: Netanyahu's Wife Charged With Misuse of Public Funds for Meals
  • 16 hours Could oil demand collapse rapidly? Yup, sure could.
  • 2 hours Saudi Arabia turns to solar
  • 4 hours Russia's Energy Minister says Oil Prices Balanced at $75, so Wants to Increase OPEC + Russia Oil by 1.5 mbpd
  • 16 hours OPEC Meeting Could End Without Decision - Irony Note Added from OPEC Children's Book
  • 16 hours Gazprom Exports to EU Hit Record
  • 5 hours Saudi Arabia plans to physically cut off Qatar by moat, nuclear waste and military base
  • 21 hours China’s Plastic Waste Ban Will Leave 111 Million Tons of Trash With Nowhere To Go
  • 21 hours Kaplan Says Rising Oil Prices Won't Hurt US Economy
  • 12 hours U.S. Withdraws From U.N. Human Rights Council
  • 9 hours EU Confirms Trade Retaliation Measures vs. U.S. To Take Effect on June 22
  • 1 min Hot line, Macron: Phone Calls With Trump Are Like Sausages Best Not To Know What Is Inside
  • 14 hours What If Canada Had Wind and Not Oilsands?
  • 15 hours "The Gasoline Car Is a Car With a Future"
  • 15 hours Sell out now or hold on?
Alt Text

Don’t Expect Palladium Prices To Plunge

Palladium has recently soared to…

Alt Text

Electric Car Industry Faces A Looming Supply Shortage

The rapid penetration of electric…

Alt Text

World Class Copper Auction Draws Major Interest

Peru’s mega Michiquillay copper is…

Dave Forest

Dave Forest

Dave is Managing Geologist of the Pierce Points Daily E-Letter.

More Info

Trending Discussions

Chinese Environmental Crackdown Could Lift Commodity Prices

Beijing

I’ve been writing the last few weeks about the unfolding metals supply crisis in China. Triggered by a wave of environmental checks at mining and processing facilities across the country. 

One of the big questions is: how much production will be impacted by the environmental crackdown?

And this week, we began to get answers. 

Key producer China Minmetals confirmed Monday that it has been targeted by environmental regulators. With the company saying it will be forced to complete a massive upgrade of its smelting facilities. 

Those smelters are primarily located in the province of Hunan. Where regulators said they found widespread environmental damage at Minmetals facilities located along major waterways. 

Faced with those findings, Minmetals will now launch an upgrading program at its smelters. At a reported cost of 10 billion yuan, or about $1.5 billion. 

Those upgrades will affect Minmetals’ output of copper, lead and zinc. The company didn’t specify exactly how much production will be impacted, but given the financial scale it’s likely a significant amount of output is involved. 

Some or all of that production will almost certainly have to be halted during the upgrading work. Meaning recent supply loses from closures for environmental inspections will now be extended for months. 

That’s going to make Chinese supply of copper and lead/zinc tighter for longer. Meaning we could see continued upward momentum in import demand to fill the gap.  Related: Is OPEC Throwing In The Towel On U.S. Market Share?

It’s also critical to remember: this is just the first firm targeted publicly by environmental regulators. With a fourth round of checks just wrapping up, we could see more firms and facilities being shut for upgrades like these. 

This will continue to be one of the biggest stories for global mining and metals prices. Watch for more news on closures, as well as stats on Chinese metal production and imports.

Here’s to taking a breather.

By Dave Forest

More Top Reads From Oilprice.com:




Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News