China's copper cathode output in August

China's copper cathode output in August was 989,000 mt, an increase of 63,100 mt or 6.8% month-on-month, and a growth of 15.5% year-on-year. The output increased 2,900 mt compared with the expected 986,100 mt. The output totalled 7.47 million mt from January to August, an increase of 771,800 mt or 11.52% year on year.

Only one smelter remained in maintenance in August. The seven smelters that undertook maintenance in July resumed production. And one smelter newly-commissioned in June continued to yield output. These factors drove a noticeable growth in output in August. In addition, sulphuric acid prices, which had dragged on copper output previously, rose across China. On the other hand, domestic blister copper supply tightened in August as the price spread between copper cathode and copper scrap shrank. This can also be reflected in the slight decline in RCs of blister copper. According to the latest statistics from SMM, as of September 1, the average RC of blister copper in the south was 950 yuan/mt, a drop of 100 yuan/mt from the beginning of August. This reduced copper output at several smelters relying on domestic blister copper. The average operating rate of copper cathode industry rose 5.53 percentage points month on month to 92.02% in August. (SMM adjusted the production capacity of a smelter in the north-west. The current total capacity in the SMM survey is 12.655 million mt/year, an increase of 80,000 mt/year).

SMM statistics showed that 5 smelters have maintenance plans in September, but the actual impact will be insignificant. One smelter in east China will be put into operation. Therefore, SMM believes that the output in September will only decrease slightly. According to the production schedules, SMM predicts that the domestic output of copper cathode in September will stand at 986,100 mt, a decrease of 2,900 mt or 0.29% from the previous month, but a year-on-year growth of 8.5%. The accumulated output from January to September is expected to stand at 8.46 million mt, an increase of 11.15% or 848,900 mt year on year. According to SMM statistics, few smelters will conduct maintenance in the fourth quarter. And a large-scale smelter will resume production from maintenance. SMM thus expects copper cathode output to continue to remain at a high level in the fourth quarter with the monthly average output exceeding 1 million mt.