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Exclusive: China's base metals output in Apr

Data Analysis 02:42PM May 09, 2018 Source:SMM

SHANGHAI, May 9 (SMM) – This is a roundup of China's base metals output in April. SMM surveyed major producers in the market to obtain information for calculation.

Copper: China's refined copper output came in at 737,800 mt in April, up 3.4% month on month and up 14.2% year on year, an SMM survey showed. Output in the first four months of this year stood at 2.86 million mt, up 11.9% on the year.

April's output exceeded the previous forecast as the actual output of Jiangxi Copper, Jinchuan Group, and Dongying Fangyuan Nonferrous Metals in April exceeded their plans. Moreover, fewer maintenance works also accounted for the year-on-year growth. 

About 20,000 mt of output was affected by maintenance from January to April this year, compared with over 100,000 mt of output affected during the same period last year.

Output growth in April was mainly contributed by copper produced from concentrate. Small- and medium-sized secondary copper smelters that used scrap, blister and anode copper as raw materials generally saw operating rates below 50%, the SMM survey found. This is unlikely to change in the short term.

SMM estimates copper output in May to stand at 732,500 mt, down 0.72% month on month and up 17.2% year on year. Output in the first five months of this year is expected to come in at 3.59 million mt, up 12.9% on the year.

Alumina: China's alumina output came in at 5.81 million mt in April, up 2.1% year on year. Daily output stood at 194,000 mt, up 4.9% month on month. Output in the first four months of this year stood at 22.33 million mt, flat from the same period last year.

As the heating season ended, alumina plants across the country have resumed operations except for Kaiman Aluminum in Sanmanxia and Million King Group. Excess production was seen at some companies due to higher prices. Alumina output at Guizhou Huajin increased as maintenance on its roasting furnaces ended. Rectifications at East Hope Jinzhong Chemical also ended in April.

SMM estimates alumina output in May to stand at 6.1 million mt, with a daily output of 197,000 mt. The increase would mainly be attributed to the recovery of operations for the whole month. New capacity at Xiaoyi Huaqing Aluminium will also bolster its alumina output.

Aluminium: China's aluminium output stood at 2.95 million mt in April, down 3.1% year on year, SMM research found. Output in the first four months of this year came in at 11.72 million mt, down 2.6% on the year.

The annualised operating capacity grew by 263,000 mt to 35.9 million mt from the previous month. The commissioning of capacity rose at a slower rate as the uptick in alumina prices led to higher cost. This was despite higher aluminium prices. In the short term, supply tightness is likely to intensify as it grows slower than demand. Production schedules of new capacity at Guizhou Huaren Aluminium, Guangxi Hualei New Materials, Chalco Shanxi Huarun, and Meixin Aluminium have all been postponed.

Output of aluminium is expected to be 3.08 million mt in May, down 3.1% year on year.

Primary lead: China's primary lead output in April dipped on the month as more primary lead smelters underwent maintenance. This was despite the production restriction in north China eased on better weather condition. Smelters such as Yuguang, Nanfang, Jiangxi Copper continued their maintenance in April from March, and more including Shuikoushan, Hongchi, Mengshan, Dongling started repairing work in April, SMM learned. Some smelters suspending for environmental rectification also accounted for the decline in primary lead production. 

Hunan Jingui and West Mining Group plan to conduct maintenance in May, and Anhui Tongguan is expected to upgrade its equipment at the end of May. Beyond that, most primary lead smelters are expected to end maintenance work in May, SMM survey showed. This includes Nanfang, Shuikoushan, and Jiangxi Copper. SMM expects that primary lead production will rebound in May to 246,700 mt.

Zinc: China produced 444,600 mt of refined zinc in April, down 0.3% month on month and up 7.1% year on year, SMM data showed. 

Smelters such as Hunan Zhuye, Anhui Tongguan, and Yunnan Yuntong Zinc resumed production from maintenance in April, and Baiyin Nonferrous Group released new capacity of nearly 20,000 mt. However, with major smelters such as Shanxi Dongling and Jiangxi Copper shutting down their production for regular maintenance, output in April went down by 1,300 mt.

Jiangxi Copper will resume normal production in May, and Hechi Nanfang plans to recover operation in mid-to-late May. SMM estimates that zinc production in May will be around 444,000 mt.

Nickel: Due to the drop of working days, April's nickel production registered a month-on-month dip of 2.7% to 11,900 mt. The year-on-year decline was 7.6%. Output in the first four months of this year stood at 46,500 mt, down 11.5% from the same period last year.

SMM forecasts nickel production in May to be 12,200 mt, up 2.5% from April as operating rate is likely to pick up.

Nickel pig iron (NPI): At 40,700 mt in nickel content, China’s NPI output in April was up 6.8% month on month and 33% year on year. The output in the first four months of 2018 reached 150,000 mt in nickel content, registering a 15.6% year-on-year increase.

High-grade NPI production increased 10% for the month as maintenance works come to an end at plants in Shandong and Jiangsu. The increase, however, was lower than expectation due to environmental inspections in Jiangsu. Output of low-grade NPI dipped 12% month on month due to cutback at integrated #200 stainless steel plant.

We expect production in May to be 40,100 mt in nickel content, slightly down from April. This is mainly due to environmental restrictions in Jiangsu and maintenance of ferronickel plants in May.

Tin: China produced 14,067 mt of refined tin in April, 7.1% higher than in March as tin ingot output grew in Yunnan, and some secondary tin smelters increased production. 

Tin production in the near term is likely to be affected by the high prices and tight supply of raw material seen in April. This was resulted from a significant decline in the imported tin ore from Myanmar. 

We expect to see production in May at around 14,000 mt. We do not rule out the possibility that some tin plants will cut production due to tight supply of raw materials.

 


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Key Words:  base metal   output