Exclusive: China's base metals output in Sep

SHANGHAI, Oct 12 (SMM) – This is a roundup of China’s base metals output in September. SMM surveyed major producers in the market to obtain information for calculation.

Copper

China produced 716,800 mt of copper cathode in September, down 2.78% from August but up 4.72% from a year ago. Growth exceeded SMM's forecast of 741,500 mt

This grew overall output in January-September 11.7% from the corresponding period last year to 6.51 million mt.

Output fell unexpectedly last month as Fuye Group, Dongying Fangyuan and Xinjiang Wuxin put smelters under maintenance and as tight supplies of blister copper lowered utilisation rates at some smelters.

For newly or resumed capacities thus far this year, Zhongyuan Gold Smelter, Tongling Nonferrous Metals Group’s new Jinchang smelter and Yuguang Gold & Lead have reached full capacity. Output remains low at SDIC Jincheng Metallurgy, Chalco Southeast, Western Mining’s smelter in Qinghai and Wuzhou Jinsheng.

Environmental restrictions and tight supplies of raw materials hindered the recovery of output of secondary materials.

Copper output in China is likely to grow to 731,600 mt in October, some 1.26% higher than October 2017, as new capacities ramp up and as some capacities recover from maintenance. But output growth will be limited by maintenance works at Zhongtiaoshan Nonferrous and Daye Nonferrous.

Some smelters told SMM that they would maintain high operating rates as treatment charges (TCs) for spot concentrate remain at highs and as they attempt to meet annual production targets.

In January-October, overall output is expected to amount to 7.24 million mt, up 10.6% from the same period in 2017, based on production schedules across smelters.

Alumina

China produced 5.95 million mt of alumina in September, up 3% from a year ago. Overall output in January-September came in at 52.11 million mt, up 1.9% from the corresponding period last year.

Daily output averaged 198,000 mt, up 3.8% from August as higher profits encouraged southwestern refineries to raise production. Refineries in Shanxi and Henan provinces gradually resumed operation from cutbacks or maintenance, and this also grew overall production.

SMM expects daily output in October to stand 2% greater than September, as production resumes at State Power Investment Corp Shanxi Aluminum, and as new capacity commissions at Shanxi Xiaoyi Alumina Refinery and Eastern Hope Jinzhong Aluminum. Output in October is expected to come in at 6.27 million mt with daily output of 202,000 mt.

Aluminium

China produced 3 million mt of primary aluminium in September, up 2.9% year on year. This lowered overall output in January-September 1.3% from the corresponding period last year, standing at 27.05 million mt.

There is about 37.38 million mt of primary aluminium capacity in operation across China as of the end of September and about 4.66 million mt of idle capacity. Operating rates in September came in at 88.9%, down 0.3 percentage point from August as higher costs expanded losses.

Some high-cost capacities in Shaanxi and Henan provinces shut permanently and this shrank operating volumes. Commissioning of new capacities continued to be slow, and this is expected to continue through November.

SMM estimates output in October at 3.1 million mt, up 3% from the same period last year. The annual change for the January-October period will remain to in contraction of 0.9%.

Nickel

Some 10,900 mt of nickel was produced across China in September, standing 12.47% lower than the same period last year. This lowered overall output in January-September by 10.05% to 106,000 mt.

In September, China’s nickel output shrank 4.04% from August as two producers continued maintenance.

SMM learned that maintenance has since ended and this is likely to bolster output by 2,300 mt, or 21%, to 13,200 mt in October.

Nickel pig iron (NPI)

China’s NPI output in September grew 7.47% from August to stand at 41,300 mt in nickel content, up 2.97% on a yearly basis. Overall output came in at 333,600 mt in nickel content, 10.7% higher than the same period last year.

Steady production across producers in Inner Mongolia continued to grow output of high-grade materials. There was about 36,900 mt in nickel content of high-grade NPI produced across China in September, up 8% from August, with 5,250 mt in nickel content of that produced in Inner Mongolia, up 22% from the prior month. Production resumption at producers in Jiangsu also helped to bolster output of high-grade NPI.

China’s output of low-grade NPI increased by 3% to 4,500 mt in nickel content as some producers in the east resumed operation.

SMM expects China’s overall NPI output to inch up 1.72% to 42,100 mt in nickel content in October as output growth in high-grade materials would be partially offset by declines in low-grade materials. Output of high-grade NPI is expected to rise by 3% to 38,100 mt in nickel content while that of low-grade NPI is likely to decrease by 11% to 4,000 mt in nickel content as a mill in Fujian with integrated operation of NPI and stainless steel production would cut output of low-grade NPI.

Zinc

Resumption from maintenance raised output of refined zinc across Chinese smelters to 446,700 mt in September, up 6.7% from August, but down 5.46% from a year ago. Total output in the first nine months of the year fell 0.07% from 2017 and stood at 3.97 million mt.

Last month, smelters in Inner Mongolia returned to operation after maintenance, with only Western Mining in Qinghai province under routine overhaul.

Concentrate treatment charges (TCs) gained significantly as imports grew supplies and domestic mines operated as usual. Higher TCs, together with higher prices of zinc in September, buoyed profit margins across smelters.

Output of refined zinc is expected to grow 11,700 mt, or 2.62% from September to stand at 458,400 mt in October. This will lower by 8.46% from a year ago. Year-to-date output through October is likely to decrease 1.01% on the year.

Production will recover at Western Mining this month, with output extending gains at Baiyin Nonferrous Metals and Luoping Zinc & Electricity. Production cuts at Hanzhong Zinc and maintenance at Henan Yuguang Zinc will affect overall output.

Lead

China’s output of primary lead in September inched up 2.16%, or some 5,000 mt, from August and stood at 253,400. This is down 15.78% from a year earlier.

In January-September, overall output of primary lead fell 10.26% from last year and came in at 2.19 million mt, showed SMM data. SMM had forecast September output of 249,000 mt.

Gains in primary lead output exceeded expectations as some smelters in Liaoning postponed maintenance and as some in Yunnan, Henan and Anhui recovered production from maintenance or technological upgrading. With the end of the year approaching, some smelters stepped up output to meet annual production and sales targets. This also helped to drive up the overall output in September.

Last month, some smelters in Hunan failed to operate at full capacity as supplies of concentrate tightened and environmental probes were underway, while some smelters in Yunnan and Qinghai undertook maintenance.

SMM expects little change in overall output for October as output recovery or increases at some smelters would be offset by suspended production at other smelters for maintenance. Overall output of primary lead is likely to stand at 252,000 mt in October.

Tin

China’s output of refined tin edged down 0.9% from August to stand at 13,922 mt in September.

Last month, the Guangxi-based China Tin Group resumed full output while the Inner Mongolia-based CNMC Chifeng Dajingzi Tin undertook maintenance from late September, which is likely to last for about a month.

Some smelters in Yunnan and Jiangxi ramped up output with adequate stocks of raw materials and as tin prices climbed at one point.

Some small smelters cut output as low processing fees, suppressed by tightening supplies of ore, squeezed profit margins.

SMM expects little change in China’s tin output in October, around 14,000 mt, given the relatively stable market.