China Cu Output Data Analysis in April (May 21, 2012)

SHANGHAI, May 21 (SMM) –

Copper Concentrate
According to the NBS, China's copper concentrate output in April was 131,000 mt, virtually flat with March's 132,000 mt.

The SHFE/LME copper price ratio has remained extremely low since earlier 2012, but while executing long-term copper concentrate contracts, copper smelters opted to cut purchases of spot copper concentrate, opting instead to buy directly from copper mine operators. Due to increases in demand for domestic copper concentrate, China's copper concentrate output moved at high levels in both March and April.

Refined Copper
According to the NBS, China's refined copper output in April was 491,000 mt, down 19,000 mt from March.

Although large domestic copper smelters did not conduct unit maintenance in April and maintained normal production, they still had little interest in buying spot copper concentrate given the unfavorable SHFE/LME copper price ratio, choosing instead to use supply from long-term copper concentrate contracts. The unfavorable SHFE/LME copper price ratio also depressed importer enthusiasm in importing scrap copper, leading to tight domestic scrap copper market supply, and causing refined copper output at smelters using scrap copper as raw materials to fall during April. According to SMM sources, some smelters are planning unit maintenance in May, so China's refined copper output is expected to fall to around 470,000 mt.