Chinese copper and aluminum output set for new record in April

Reuters reported that China's copper and aluminum production are set for another record month in April after a March surge resulting from expanded capacity and rosy demand forecasts by producers.

Data from the National Bureau of Statistics showed that China produced a record 470,000 tonnes of refined copper in March up nearly 6% from a peak set in December 2010.

Analysts said that some of the output increase was linked to a natural rebound after a short month and smelter slowdown during the Lunar New Year holiday in February as well as demand for copper and aluminum intensive products such as air conditioners ahead of the summer. Higher than expected inflation in March won't lead smelters to keep production in check in the near term.

Mr Guo Yong analyst at Jinrui Futures said that "We did not see any factors that limited smelter production in March. In fact many smelters such as Jiangxi Copper have been increasing production."

China's economy grew an annual 9.7% in the Q1 versus 9.8% clip in the previous quarter while consumer inflation hit 32 month high of 5.4% in March government data showed on Friday. The data raised broad investor concerns that Beijing may move again to tighten credit further, hitting copper and aluminum demand in the world's top consumer of the both metals.

Mr Guo Yong said that expanded smelter capacity and sufficient raw material supply has pushed up China's copper production. Jiangxi Copper Company Limited plans to produce 940,000 tonnes of refined copper this year from 900,000 tonnes last year based on the demand and supply situation.

He said that smelters had been building stocks since extra supplies had driven down international prices after the Japan quake. Some small copper production plants using scrap as feed were built in the southern provinces of Guangdong and Guangxi adding production this year.

China's primary aluminum production also rose to record high at 1.428 million tonnes in March up nearly 1% from the previous May 2010 record even as Beijing has pushed for aggressive consolidation in the industry. However, many aluminum smelters have increased production and started new capacity after local power supply rose in late February.

(Sourced from Reuters)

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