Exclusive: China's base metals output in November

SHANGHAI, Dec 8 (SMM)—This is a roundup of China's base metals output in November 2020, from an exclusive survey of key producers by SMM analysts.

Copper

China’s copper cathode output increased month on month in November as the amount of new capacities continued to rise and as copper smelters stepped up production at the end of the year. In addition, rising inflow of high-quality copper scrap into domestic markets after the secondary copper resource policy took effect from November 1 boosted operating rates at copper scrap smelters.

SMM survey showed that China produced 831,700 mt of copper cathode in November, rising 1.23% from October, and 4.11% from a year ago. For the first eleven months of 2020, China’s copper cathode output totalled 8.45 million mt, up 3.79% from the same period last year.

According to smelters’ production schedules, SMM expects China’s copper cathode output to rise 3.55% on the month and 6.91% on the year to 861,200 mt in December, and output for January-to-December is likely to increase 4.07% on the year to 9.31 million mt, as some smelters recover from maintenance and new capacities come online.

Alumina

China’s alumina output stood at 6 million mt in November. This included 5.8 million mt of metallurgical-grade alumina, with the daily output up 0.74% on the month and 6.29% on the year to 193,000 mt. Output of metallurgical-grade alumina over the first eleven months of the year totalled 61.54 million mt, 2.4% lower on a year-on-year basis. Chinalco Huasheng’s phase I project in southwest China with annual capacity of 2 million mt yielded output in November, which offset the output reduction in north China in a heating season.

As of early December, the operating capacity of metallurgical-grade alumina stood at 68.4 million mt/year. SMM sees output of metallurgical-grade alumina at 5.81 million mt in December (31 days), with the daily output falling slightly as production restrictions in the heating season curbed output at Chinalco Zhongzhou and Luoyang Wanji.

Aluminium

China’s primary aluminium output rose 7.77% year on year to 3.16 million mt in November (30 production days), showed an SMM survey. As of early December, there was 38.79 million mt among 42.75 million mt per year of existing primary aluminium capacity in operation, while operating rates across Chinese primary aluminium producers stood at 90.8%. With Inner Mongolia Chuangyuan and Yunnan Qiya slowing yielding output, the daily average primary aluminium output rose 600 mt from October to 105,400 mt in November. The proportion of aluminum water came in at 68.3%, down 0.2% month on month.

During the first eleven months of 2020, China’s primary aluminium increased 4.5% year on year to 33.85 million mt, while consumption rose 5.81% to 34.83 million mt.

SMM expects China’s primary aluminium output to stand at 3.27 million mt in December, while import at about 100,000 mt. Aluminium processors in Henan and Shandong are likely to reduce operating rates in the heating season, and downstream demand in north China shows signs of weakening, which may lead to a slight increase in aluminium inventories.

Nickel

China’s refined nickel output rose 11.56% or 1,416 mt from October, but shrank 2.73% from a year earlier, to 13,700 mt in November. Output at a Gansu smelter increased 13.64% month on month as it returned to normal production from maintenance. Xinjiang smelter continued to keep stable production, with output holding largely unchanged from October, while the smelter in Shandong still operated at low capacity due to raw materials shortages and cash flow issues, producing more than 150 mt of refined nickel in November. Except for the three smelters mentioned above, other domestic smelters remained in suspension.

SMM expects China’s refined nickel output to fall to 13,200 mt in December. The Gansu smelter is unlikely to ramp up production temporarily as it could fulfill its annual production targets with normal production schedule, while the smelters in Xinjiang and Shandong will keep output unchanged from November. Smelters in Jinlin, Tianjin and Guangxi will remain shut down and have not determine their resumption date yet. 

Nickel pig iron (NPI)

China’s NPI output shrank 2.2% from October to 42,700 mt Ni in November. This included 35,100 mt Ni of high-grade NPI, down 2.3% on the month, and 7,600 mt Ni of low-grade NPI, down 2.2% month on month. High-grade NPI output extended declines in November as large-scale NPI plants reduced output or operating capacity, and the output cuts are expected to expand in December as raw materials inventories are running low. Low-grade NPI output fell slightly in November though an integrated #200 stainless steel mill recovered from maintenance.  

SMM expects China’s NPI output to fall 6.8% on the month to 39,800 mt Ni in December. Output of high-grade NPI is likely to shrink 9.3% to 31,900 mt Ni, while that of low-grade NPI to rise 4.9% to 7,900 mt Ni due to commissioning of new capacity at the integrated #200 stainless steel mill.

Nickel sulphate

China’s nickel sulphate output shrank 5.23% on the month but rose 48.63% on the year, to 73,300 mt or 16,100 mt in nickel content in November. This included 65,000 mt of battery-grade materials and 8,400 mt of electroplating materials. Total downstream demand for nickel sulphate increased by 9.58% in November, with demand for battery-grade nickel sulphate from new energy battery makers rising nearly 12% on a monthly basis. Nickel salts plants kept stable production in November on strong demand from new energy batteries, while several plants slightly cut output due to shortages of raw materials.

SMM expects China’s nickel sulphate output to dip 600 mt or 0.82% from November to 72,700 mt in December as some nickel salts plants may trim output slightly due to shortages of raw materials.

Zinc

China's refined zinc output stood at 562,300 mt in November, falling 6,800 mt or down 1.22% on month and up 5.94% on year. For January-November, output totalled 5.55 million mt, up 4.57% from the same period last year. Zinc smelters produced 81,800 mt of zinc alloy in November, flat from the previous month.

SMM survey showed that China's refined zinc output in November basically met expectations. Treatment charges (TCs) for domestic 50 grade zinc concentrate continued to decline in November. Smelters' profits decreased, and refineries with reduced production were mainly concentrated in Sichuan, Shaanxi and Yunnan. Refineries in Gansu and Yunnan had sufficient supply of raw materials, and the annual production plan was completed at the end of the year, so they were in a full capacity in November.

The mainstream turnover of TCs for 50-grade zinc concentrate in China fell to 4,200 yuan/metal mt in December, and the production profit of smelter enterprises remained low. According to the scheduled production of each smelter in December, the refineries in Hunan and Yunnan were expected to turn into maintenance, while the market generally rumored that the refineries with reduced production had normal production schedule in December.

The domestic refined zinc output in December is expected to decrease 14,200 mt to 548,100 mt.

Lead

SMM data showed that China produced 290,000 mt of primary lead in November, up 9.82% from October, and up 6.86% from a year ago. For January- November, output increased 4.63% from the same period last year.

SMM survey showed that smelters such as Haicheng Chengxin, Western Mining and Yongning Gold and Lead resumed production from maintenance with significant overall increase in output. In addition, some smelters have increased production in November in order to complete the annual production and sales plan before year-end. Although there was limited production due to air pollution in Henan, only the crude refining link was affected. But production across the refining link remains stable so the current month's output is not affected.

Considering the annual production and sales plan, the production of most smelters remain stable from November. Meanwhile, smelters in Hunan resumed production. Yunnan Zhenxing and Jiangxi Jinde carried out production line maintenance, lasting for 7-15 days. Henan Xinling will turn into a one-month maintenance from mid-December. Primary lead output will decline slightly in December.

SMM expects China's primary lead output to reach 287,000 mt in December.

Tin

China's refined tin output fell on a month-on-month basis in November as two large-scale smelters in Yunnan and Guangxi cut production.

SMM data showed that China produced 13,937 mt of refined tin in November, down 5.75% from October. The new plant of a large-scale smelter in Yunnan is still in the commissioning stage due to the removal, and the output slightly decreased. The output of the large-scale smelter in Guangxi has been affected by equipment maintenance, and has now resumed normal production. The output of other small and medium-sized smelters fluctuated little, and some smelters cut their output slightly due to equipment maintenance or environmental protection inspection.

It is reported that the import customs clearance speed of tin ore in Myanmar has improved but with limited increase. It is expected that the tight supply of domestic tin ore will not recover rapidly in December.

China's refined tin output is expected to reach 14,500 mt in December.