China’s Refined Copper Output Hit a Record of 714,000 Tons in Sept. 2014

SHANGHAI, Oct. 24 (SMM) – The National Bureau of Statistics indicates China’s refined copper output hit an all-time high of 714,000 mt in September, a rise of 33,000 mt, or 4.77%, on the month, and up 12.05% YoY. This allowed the January-September production to grow 11.01% YoY to 5.69 million mt.

The 33,000 mt MoM increase was in line with SMM’s survey, which shows 35,000 mt output growth at major Chinese smelters. SMM surveys 23 copper smelters across China whose combined output hit 523,000 mt in September as operating rates at medium and large smelters exceeded 95%. The high spot TCs for copper concentrate prompted profit-seeking smelters to increase imports and step up production. China’s copper concentrate imports climbed to a record high of 1.29 million mt in September.

That being said, the growth in copper output across China might have been limited by declining scrap and blister copper supplies. Some scrap and blister copper suppliers held back from selling in September against weak copper prices, cutting availability. Processing charges for blister to refined copper conversion slipped from RMB 1,500/mt to RMB 1,200-1,300/mt as a result.

SMM considers NBS’ August production data inflated. The NBS reported a 50,000 mt spike in copper output in August to 680,000 mt, implying some 500,000 mt/yr of new capacity entering service that month. SMM doubts that production hit 680,000 mt in August, even after considerable capacity comes on stream, as it takes quite some time for new projects to reach capacity.