SMM Morning Review - 2010/12/14 Aluminum Market

Dec 13 (Bloomberg) --&nbsp; Copper and lead output in China, the largest consumer of both metals, advanced to records in November as producers increased output following price gains. Aluminum production declined for a third month.
Output of refined copper climbed to 443,000 metric tons last month, 4.5 percent higher than the month before, while production of refined lead gained 29.5 percent to 448,000 tons, the statistics bureau said today. Those are monthly records, according to traders and analysts.
Production of copper expanded 12.6 percent in the first 11 months to 4.374 million tons and lead output rose 9.2 percent to 3.954 million tons in the same period, the bureau said. Copper, which traded at a record in London today, is used in pipes and wiring, while lead is used mainly in batteries.
&quot;There will always be a supply response to higher prices,&rdquo; said Lin Yi, a deputy manager at Zhongda Futures Co. &quot;The price of refined copper has increased, and the amount smelters get paid for refined copper has also increased.&rdquo;
Copper for three-month delivery on the London Metal Exchange advanced 4.3 percent in the past two months, and reached an all-time high of $9,102 a ton today. The metal has advanced 24 percent this year.
China&rsquo;s imports of copper concentrate advanced to a record 683,523 tons in September as treatment fees improved. The fees usually climb when there is ample raw material, and mining companies have a greater need to compete for processing capacity.
The spot fees paid to smelters in China for turning ore into refined metal have gained to about $80 a ton for smelting and 8 cents a pound for refining, up from nearly zero in June, according to CRU International Ltd.
Aluminum Output 
China&rsquo;s output of aluminum dropped for a third month as the world&rsquo;s biggest producer implemented power restrictions to meet its energy-saving target set in the 11th &quot;Five-Year Plan,&rdquo; which ends this year. Energy accounts for as much as half the cost of making the metal used in cars and airplanes.
Refined aluminum production fell 14 percent to 1.18 million tons, the statistics bureau said. Output in the first 11 months of the year climbed 23 percent to 14.356 million tons.
&quot;The aluminum output numbers are in line with expectations,&rdquo; said Liang Lijuan, an analyst at Cofco Futures Co. &quot;As the government moves to curb energy use, primary aluminum producers are moving downstream, evidenced by the rise in aluminum products output.&rdquo;
China&rsquo;s production of aluminum products surged 23 percent to 2.17 million tons in November and jumped 25 percent in the first 11 months of the year to 19.99 million tons. 
&nbsp;
&nbsp;
 
&nbsp;