Jan 13, 2012 BEIJING (Dow Jones)--Production of industrial metals in December likely softened compared to November due to a winter slowdown, real-estate weakness and external headwinds, though full-year volumes are likely at record levels, analysts said Friday.
Steel and copper, the two metals tracked by the National Statistics Bureau in its monthly output data, are indicators of industrial health in the world's second largest economy.
The bureau is scheduled to released December's data Tuesday.
Crude steel output is widely expected to tick down slightly from November, as mills have been steadily cutting production volumes since May.
Early estimates by the China Iron and Steel Association show crude steel output in December may have dipped 0.5% on month. China's production of crude steel in November had already fallen to its lowest level in 13 months.
"Negative numbers relating to China's property market continue to emerge painting a gloomy picture of the sector, a key driver of growth for the steel market and wider economy," said Oscar Tarneberg, an analyst with The Steel Index.
Home prices eased for a fourth-straight month in December.
Still, China will set a fresh record for crude steel production for the full year. In November, it had already surpassed last year's record production of 627 million tons.
Copper production may also hit a new record for the full year despite December production easing from November levels, analysts said.
"Copper output is expected to have fallen slightly as many smelters were likely to have achieved full-year contract targets already by November," said CRU Group Analyst Grace Qu.
Qu said there's also a chance that copper output actually rose in December, as scrap copper availability was fairly tight and some smelters were yet to meet full year production targets.
Copper production is widely expected to set a record for the full year.
China produced 4.79 million tons of copper in 2010, and by November, had produced 4.78 million tons, just 10,000 tons short of last year's total. The country produced an average monthly volume of around 434,545 tons.
Refined sugar output is expected to rise in December as producers ramp up to restock historically low sugar inventories, analysts said.
In contrast to industrial metals, however, refined sugar production will almost certainly dip for the whole year, as shrinking sugar cane acreage and adverse weather hit production in 2011.
In 2010, China produced 11.05 million tons of refined sugar. As of November last year, it had produced only 9.2 million tons.