UPDATE 2-China Dec copper, nickel output at record, 2011 seen up
Jan 21,2011 9:57 AM Source:Reuters
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HONG KONG, Jan 20 (Reuters) - China's production of base metals is expected to rise this year after it finished 2010 strongly with copper and nickel hitting monthly record highs in December and tin reaching a 17-month high.
China's metal capacity continued to rise, making another record production year for all base metals in 2010 and keeping its number one ranking on the world's output of aluminium, lead, zinc and tin. It is also a leading copper and nickel consumer.
But cold weather, which has already hit lead and aluminium smelters as surging energy demand leads to cuts in power supplies, and consumption hold the keys on 2011 production, state-backed research firm Antaike analyst Ran Jun said.
"The southern part of China has already been hit by heavy snows," Ran said, who tipped yearly refined tin production to rise about 6 percent in 2011.
"Consumption holds the key, as producers won't like losses."
COPPER, NICKEL
Production of refined copper reached 444,000 tonnes in December, up 0.2 percent from the previous high in November, data from the National Bureau of Statistics showed on Thursday. m In 2010, refined copper output rose 12.2 percent on the year to 4.79 million tonnes. Output in 2011 may reach 4.9 million tonnes, according to Antaike.
December's copper output was helped by sufficient raw material supplies -- concentrate and scrap, Jinrui Futures analyst Fu Bin said.
"Copper concentrate supplies were sufficient and treatment and refining charges stayed at relatively high levels," said Fu, who expected copper output in January to hit another record.
Fu said repairs at China's top producer Jiangxi Copper in December had not greatly affected refined copper production.
Strong copper prices had also encouraged smelters to make more, traders said.
The benchmark three-month contract on the London Metal Exchange rose 31 percent last year. The price hit a record high of $9,781 a tonne on Wednesday and traded at $9,561.50 at 0552 GMT on Thursday .
Monthly refined nickel production rose 6.6 percent in December to a record 21,753 tonnes. In 2010, the output surged 24 percent on the year to 214,086 tonnes.
Antaike has expected 2011 nickel output, including refined, ferronickle and nickel-pig-iron, to rise by above 8 percent.
TIN, ALUMINIUM
Refined tin production rose 3.6 percent on the month to 15,499 tonnes in December. Output rose 11.6 percent year on year to 164,399 tonnes in 2010.
"The output rise in 2011 probably would be smaller due to limited growth in raw material supply," Ran said, who expected China would stay a net importer of tin this year.
Primary aluminium production rose 2.9 percent to 1.21 million tonnes in December after it fell 2.5 percent in
November.
But in 2010 output still rose 19.9 percent to 15.7 million tonnes thanks to expanded capacity.
Fu said extra output from new capacity in other provinces such as Inner Mongolia and Xinjiang had pushed up aluminium production in December and offset lower production in existing capacity that had been suffered from local lower power supplies.
China, holding more than 21 million tonnes of aluminium smelting capacity, has a great potential to produce much more
this year, while the power supply holds the key, smelter officials said.
Power supply cuts caused by the freezing weather have forced aluminium smelters in Henan province to keep some 800,000 tonnes of annual capacity idle. Smelters in Guizhou also face power supply cuts.
But the idle capacity could up and running after mid-February as power supply rises, smelter officials said.
"Our new 50,000-tonne of capacity should be started in mid-February," a smelter official in Guizhou said.
Antaike has predicted China would add 2 million tonnes of aluminium output this year.
LEAD, ZINC
Refined zinc production rose 1.1 percent in December to 473,000 tonnes, the third-highest monthly output. In 2010, output rose 19.7 percent year on year to 5.27 million tonnes.
Refined lead production dropped 4 percent from a record in November to 430,000 tonnes in December due to local power supply cuts in Henan, China's leading producing province.
But output managed to rise 9.8 percent year on year to 4.32 million tonnes in 2010.
Production of lead and zinc may fall in January on power cuts in Henan and other southern provinces, smelter officials said.
But for all of 2011, output may rise 9 percent on lead and 4 percent on zinc, according to Antaike estimate. |
