China refined copper hits record output

China’s production of refined copper and zinc rose to records in November amid higher smelting fees to produce the metals.

Refined copper output in November climbed 2.9 percent from the previous month to 755,000 metric tons, setting a fourth straight record, while zinc production advanced 6.4 percent to 548,000 tons, according to data released today by the National Bureau of Statistics. China’s smelters are increasing output as the fees they can charge miners to process ores into refined metals rise.

“Operating levels are close to full capacity” at Chinese copper smelters because of the higher fees, Xiao Fu, head of global commodities strategy at Bank of China International Ltd., said by phone from London. “We could see fairly healthy production growth next year.”

Jiangxi Copper Co., the country’s largest smelter of the metal, boosted concentrate-processing charges by 16 percent for next year as global supply of the raw material rises. Morgan Stanley increased its forecast for contracted zinc processing fees by more than 8 percent to $260 a ton as spot fees have climbed 11 percent since mid-year, the bank said in a report today.

Copper prices on the London Metal Exchange have slid 13 percent this year, while zinc is up 5 percent.

Rising refined zinc prices and higher processing fees “improved the profitability for zinc smelters,” said Wan Ling, the Beijing-based assistant chief representative in China for CRU, a researcher. “High production levels will continue in the coming months.”

China’s output of alumina, a raw material used to make aluminum, rose 0.4 percent to a record 4.18 million tons last month. Production of aluminum increased 0.4 percent to 4.35 million tons, the highest since June.

Chinese primary aluminum output will reach 27.8 million tons this year and almost 30 million tons in 2015 as new capacity is added in Inner Mongolia and Xinjiang provinces, Citigroup Inc. said in a report Dec. 3.