UPDATE: China November Copper Output Falls; Aluminum At 10-Month Low

SHANGHAI, Dec 09, 2011 (Dow Jones) -- China's copper output fell in November from the previous month as maintenance and a shortage of raw material prompted smelters to keep utilization at low levels, while aluminum production was the lowest since February.

Copper output may rebound this month as producers finish up maintenance and rush to meet annual production targets, while output for the full year likely will register a sharp rise from 2010 due to capacity expansions at smelters.

China's copper output in November dropped 4.5% from October but rose 9.3% on year to 448,000 metric tons, the National Bureau of Statistics said Friday.

Total output in the January-November period rose 16.3% to 4.78 million tons, it said.

A supply shortage of copper concentrate to China led to falling spot treatment and refining charges, or TC/RCs, discouraging producers from processing ore, analysts said.

A key source of revenue for smelters, TC/RCs in China fell to $25 a ton and 25 cents a pound late last month from around $30-$40/ton and 30-40 cents a pound at the start of the month, as reconstruction efforts in Japan diverted some supply away from China. TC/RCs tend to fall when mine supply is scarce or producers intend to cut output, traders said.

"An ongoing shortage of scrap copper [which is also used in the making of refined copper] is also capping [refiners'] ability to make more metal," said Everbright Securities Futures analyst Xu Yongqi.

Aluminum Output Falls To Lowest Level Since Feb

Aluminum production fell to its lowest level since February as expected new capacity failed to come online and power restrictions in some provinces kept capacity idled, analysts said.

China produced 1.38 million tons of primary aluminum in November, a drop of 2.6% on month but a rise of 13.4% on year.

"Around 300,000 tons of manufacturing capacity has been brought online so far this year in Xinjiang [Autonomous Region], a lot lower than our original estimate of one to two million tons, so that could be the main reason that we have seen consistent declines since June," said a Shanghai-based analyst at an international trading firm.

Between January and November, primary aluminum production rose 9.9% on year to 16 million tons.