Price recovery sparks domestic Chinese copper, iron ore production boom
China's dozens of iron ore mining companies produced more in June than any month since October 2015, making the most of higher prices and record-breaking steel output.
The country's crude iron ore production jumped 5% from a year ago to 124.7 million tonnes (on a 58–65% Fe content basis tonnage is closer to 25m–30m) in June, data from the National Bureau of Statistics showed Wednesday. Year to date crude iron ore output is up 9.2%.
Number two producer Rio Tinto said in March 30m tonnes of domestic Chinese capacity had already returned to the market compared to the 140 million that exited over the previous three years.
If this rate of production is sustained 2017 would comfortably outpace China's of 8.44m tonnes of refined copper production last year
China's refined copper production was up 12% percent from the same time last year to 768,000 tonnes, the highest rate in 18 months. If this rate of production is sustained 2017 would comfortably outpace last year's total of 8.44m tonnes of refined copper production.
China's smelters working at capacity helps to explain the decline in imports of refined metal. Data released last week showed China imported 2.23 million tonnes of copper in the first half of this year, down 18.4% compared to same period last year.
However, imports of copper concentrate continued to grow from record levels reached last year. June imports came in at 1.4m tonnes, up 4.4% compared to the same month last year, while imports for the first six months totalled 8.3 million tonnes, up 3.6%.
Zinc production was flat at 544,000 tonnes in June and down 1.2% for the first six months of the year, while lead production declined 4% to 437,000 tonnes for the month. For the first six months of the year, lead output is up 5% compared to H1 2016.
Data released on Monday showed Chinese steel output last month rose 5.7% from the year before to a record 73.23 million tonnes, surpassing April's all-time high of 72.78 million tonnes as Shanghai rebar prices hit three-and-half year highs.
Aluminium production jumped 7.4% year-on-year to 2.93 million tonnes in June, exceeding December's record of 2.89 million tonnes.
China is responsible for producing half the world's steel, consume more than 70% of the seaborne iron ore trade and some 45% of world copper output.