SHANGHAI, Jan. 24 (SMM) –According to the NBS, China's refined copper output was 580,000 mt in December, up 22.4% YoY and 9.2% MoM.
According to SMM survey, the average operating rate during December at major Chinese copper smelters was 92.86%, the highest of 2012. Most of copper smelters kept operating rate at high levels as their raw material stocks remained sufficient. Moreover, some copper smelters chose to step up production to meet annual production targets, while some scrap copper smelters increased the rate since the price gap between scrap and refined copper improved. Hence, China's copper output experienced increased during December.
However, SMM remains conservative about the as high as 50,000 mt MoM increase in China's December output reported by the NBS. Daye Nonferrous Metals and Guangxi NonFerrous Metals Group did release new capacities in 4Q, but contributed little to December's copper output.
SMM reminds investors that downstream consumption has yet to increase significantly, despite an increase in China's copper output. Copper consumption should witness a traditionally low demand period before the Chinese New Year holiday, but smelters have little adjustment in production during this period. Although markets become more confident about a pick-up in post-holiday consumption, copper prices are likely to continue fluctuating in a narrow band for the foreseeable future.