Exclusive: China's base metals output in Nov

SHANGHAI, Dec 7 (SMM) – This is a roundup of China's base metals output in November. SMM surveyed major producers to obtain information for calculation.

Copper

China produced 746,100 mt of copper cathode in November, up 3.53% from October and 3.91% from a year earlier. This grew output in January-November to 7.97 million mt, standing 9.7% higher than same period in 2017.

High spot concentrate treatment charges (TCs) and sulphuric acid prices prompted smelters to operate in high gear last month. Improved utilisation rates across newly-commissioned and resumed capacities of Chalco Southeast, Western Mining's smelter in Qinghai, SDIC Jincheng Metallurgy and Wuzhou Jinsheng offset the impact of maintenance at some plants and helped grow overall output.

As of the end of November, all new capacities that came online this year have managed to produce copper cathode and those of Zhongyuan Gold Smelter, Tongling Nonferrous Metals Group's new Jinchang smelter and Yuguang Gold & Lead have reached full capacity.

Rising utilisation rates across new capacities and a rush to meet annual production targets are expected to grow copper output in December. SMM forecasts that China’s output of copper cathode would grow 2.88% month on month to 767,600 mt in December. Output in 2018 is expected to stand at 8.74 million mt, up 9.1% from 2017.

Alumina

China produced some 6.08 million mt of alumina in November, up 6.7% from a year ago, with average daily output at 203,000 mt, 4.1% higher on the month. In January-November, China’s alumina output totalled 64.3 million mt, 2.3% higher than the same period last year.

New, expanded capacity in Shanxi and Henan provinces, as well as resumption after maintenance in Guizhou and Shanxi accounted for the increase. Eased supply tightness of raw materials in Shanxi also buoyed the production.

In November, maintenance across alumina refineries, electric power plants, and baking furnaces in Shanxi lowered output of the region. In Guizhou, visit of environmental inspection team affected production at some plants; tight supplies of bauxite also deterred operation at mills. Moreover, pollution weather curtailed production of refineries in Zhengzhou of Henan, and environmental restrictions limited production in Shandong province last month. 

SMM expects average daily output of alumina in December to drop to 199,000 mt, due to production cuts across refineries in Henan. This is estimated to generate 6.17 million mt of alumina output for December.

Aluminium

China produced nearly 2.96 million mt of primary aluminium in November, up 1.8% from a year ago. However, daily average production in November fell 1.8% from that in October, and stood at 99,000 mt.

By the end of November, there was about 36 million mt of primary aluminium capacity in operation across China, up 645,000 mt from November 2017. Operating rates dipped 2.9 percentage points month on month to 85.7% in November.

Losses across aluminium smelters resulted in capacity cuts of some 2.3 million mt currently. Another 460,000 mt of capacity faces cutbacks. New capacity commissioned at slower paces, with expanded capacity in Inner Mongolia, Guangxi, and Yunnan areas coming in at smaller scales than expected. 

In December, old capacity will continue to be cut, faster than the operation of new capacity. SMM expects China’s operating capacity to dip to 35.8 million mt in December; output of primary aluminium will register 3.04 million mt, up 1.3% from December 2017.

Nickel

Some 13,700 mt of nickel was produced across China in November, standing 4.64% lower than the corresponding month of 2017. Output in January-November came in at 132,900 mt, down 8.23% from a year earlier.

On a month-on-month basis, China’s nickel output gained 3.86% in November as the approaching year-end prompted producers to step up output to meet annual production targets.

SMM learned that producers would maintain their operating rates in December. Nickel output is expected to stay flat with November in December.

Nickel pig iron (NPI)

In November, NPI output in China rose 3.75% from October to stand at 41,700 mt in Ni content, up 1.42% on a yearly basis. This grew output in January-November to 415,600 mt in Ni content, standing 8.47% higher than the same period last year.

On a month-on-month basis, output of high-grade NPI increased by 4.67% to 38,000 mt in Ni content in November, with that in Inner Mongolia up 19.9% to 5,400 mt in Ni content as the local authorities loosened their restrictions on electricity use.

For low-grade materials, output decreased by 4.97% to 3,700 mt in Ni content last month as declines in prices prompted one plant in the south to suspend production at the beginning of the month.

China’s output of NPI is expected to edge down 0.69% to 41,400 mt in Ni content in December with that of high-grade materials down 0.42% to 37,900 mt in Ni content and that of low-grade materials down 3.49% to 3,500 mt in Ni content.

Nickel sulphate

In November, China produced 8,800 mt in metal content of nickel sulphate, which translated to 40,200 mt in physical content. Production in January-November stood at 85,100 mt in metal content, or 386,800 mt in physical content.

Compared to a month earlier, production rose 4.09% in November, driven by higher output in Tianjin and Zhejiang.

Monthly output of nickel sulphate in Tianjin has stood at around 4,000 mt for two consecutive months, much higher than the previous months. It took about half a year for newly-commissioned capacity in Tianjin to reach normal capacity.

Nickel sulphate output is expected to extend its gains in December. Output in October was revised to 8,500 mt in metal content, or 38,600 mt in physical content, compared to the previously reported 8,100 mt in metal content, or 37,000 mt in physical content.

Zinc

China's output of refined zinc in November dipped 0.63% on the month and stood at 456,400 mt. This was down 10.4% from a year earlier, and brought the output in January-November to some 4.88 million mt, standing 1.95% lower than the same period last year.

TCs for zinc concentrate extended their gains last month and this bolstered producing enthusiasm across domestic smelters. Some smelters raised output by 500-1,000 mt in November on top of their regular production. Hunan Xuanhua Zinc Industry recovered operation in the second half of November. However, these failed to offset declines in output affected by mill relocation.

Zhuzhou Smelter Group relocated its smelting facility in Zhuzhou city of Hunan province, and this affected its output last month. Yunnan Chihong Zinc & Germanium lowered output as it had met annual production targets. Hanzhong Zinc Industry kept operation flat from October after small-scale maintenance on furnaces affected 1-2 days of operation. Production across smelters is unlikely to rebound much in the short run.

While Hunan Xuanhua plans to expand production further in December, relocation of Zhuzhou Smelter Group will continue to weigh on overall output.

Production schedules across smelters show that zinc output is expected to fall 0.36%, or 1,600 mt, from November, to 454,700 mt in December. This dips 5.99% from a year ago, and will lower overall production in 2018 by 2.31% on the year.

Lead

Despite smog alerts and environmental probes, China’s output of primary lead grew more than expected in November as large smelters stepped up production to meet annual output and sales targets and as some smelters in Liaoning and Henan recovered output from maintenance.

About 265,000 mt of primary lead was produced last month, up 3.74%, or some 9,600 mt month on month, but down 6.43% year on year. SMM had expected output of primary lead to climb to 253,300 mt in November.

This grew output in January-November to 2.72 million mt, standing 9.71% lower than the corresponding period last year.

In November, some smelters in Henan and Hunan were required to cut capacity by 10-30% due to heavy smog or environmental inspections, but output saw gains as most large smelters meet environmental standards. Besides, crude steel production stage, rather than the refining stage, was the major target of production curbs. Smelters could purchase crude lead to support their primary lead production.

Despite a smog season, output of primary lead is expected to grow some 15,000 mt from November to 279,800 mt in December given the anticipated end of maintenance at some large and medium-sized smelters in Henan, Shandong and Yunnan as well as the rush to meet annual production targets by year-end.

Tin

Tin output decreased by 9.7% from October to stand at 11,279 mt in November, as maintenance works and tight supplies of raw materials deterred production at smelters in Yunnan province. Annual maintenance at Yunnan Tin Group affected significantly the overall output.

Maintenance works at a large-sized tin smelter in Jiangxi province also lowered production. Guangxi-based China Tin Group and the Inner Mongolia-based CNMC Chifeng Dajingzi Tin resumed normal operation after overhaul last month. Rising prices of tin encouraged producing enthusiasm at some mills, and this offset part of the overall losses.

SMM expects tin output to nudge up to 11,600 mt in December as suspended mills will recover gradually after maintenance work.