AsianFin — China is exploring measures to tighten regulation of copper smelting capacity, as persistently low processing fees continue to squeeze profits in the sector, state media reported Thursday.

Chen Xuesen, vice chairman of the China Nonferrous Metals Industry Association, told a meeting on Wednesday that low concentrate processing fees were the “most prominent” challenge facing the industry.

The remarks come as the Chinese copper industry struggles with profit margins amid high competition and an oversupplied market. Analysts note that unchecked expansion of smelting capacity could exacerbate market imbalances and further depress returns for producers.

China, the world’s largest consumer and producer of copper, has historically intervened in base metals markets to manage supply, stabilize prices, and ensure industry sustainability. Industry insiders suggest that any regulatory measures could include stricter approval processes for new smelting projects, production quotas, or incentives to curb excess output.