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Japan copper smelters shut on quake, raises supply concerns
Fri Mar 11, 2011 6:31pm GMT
By Chikako Mogi

Japan's two major copper smelters shut down operations due to power outages in northern Japan areas hit by a powerful earthquake, raising concerns about supply disruptions if it takes a long time to repair the infrastructure.

A major 8.9 magnitude earthquake and resulting tsunami off the coast of Japan prompted top copper smelter Pan Pacific Copper Co, 66 percent owned by JX Nippon Mining & Metals, a unit of JX Holdings , to halt operations at its Hitachi refinery works.

The Hitachi refinery works produces 130,000 tonnes of copper annually, less than a quarter of Pan Pacific Coppper's planned output of 564,800 tonnes for the current fiscal year to March 31.

Mitsubishi Materials Corp , Japan's third-largest copper smelter, said its Onahama copper smelter halted operations due to electricity outage from the quake.

The company owns 50 percent of the Onahama smelter which produces about 300,000 tonnes annually.

"Although the power cut-induced production stoppages may prove to be temporary, the disruption caused by logistical and infrastructure damage is likely to take longer to fix," Barclays Capital said in a note.

Sumitomo Metal Mining Co , Japan's No.2 copper smelter, does not have a smelter in the region hit by the quake. The company forecast copper output of 404,000 tonnes for current fiscal year.

Japan's refined copper output stood at about 1.52 million tonnes last fiscal year, about 7 percent of global output.

"If there's a severe disruption the bottom line is that the concentrates market is fundamentally tight so concentrates would be redirected elsewhere, probably to China," said Christine Meilton at consultancy CRU Group in London.

A total of 11 reactors at four plants operated by three firms have shut down automatically after the earthquake, leaving 25,622 megawatts of nuclear power generation capacity, or 52.3 percent of Japan's total, in operation, Reuters calculations show.

Of Japan's 54 nuclear power generators for commercial use, five are located in the areas hit by the quake. (Additional reporting by Karen Norton and Pratima Desai; Editing by Nathan Layne)

http://af.reuters.com/article/energyOilNews/idAFL3E7EB28O20110311