Chinese output of base metals is growing even as production capacity is reduced

During June, China increased the output of many base metals. The production of modern facilities has grown despite attempts to reduce the old smelting capacity. Copper and steel output rose to levels close to record highs for the month. Meanwhile, imports of copper and iron ore dropped significantly during the month.

According to figures released by the National Bureau of Statistics (NBS), copper production in the country was 686,000 tonnes during June this year, up from 680,000 tonnes recorded a month ago. Aggregate copper production in the first six months of this year was 4.03 million tonnes, an increase of almost 9.4% over the previous year. It should be noted that China's leading steelmakers previously agreed to cut production by 350,000 tons in 2016. The new additions to production capacity are likely to keep output in 2016 close to last year's level.

On the other hand, zinc production recorded a slight decline of 0.9% to 3.03 million tonnes in January-June 2016. However, the monthly release in June this year touched its highest level in a year. China's zinc production was 541,000 tonnes in June. The volume of aluminum production in the country fell by almost 2% to 15.32 million tons during the first six months of this year.

The country's steel production totaled 69.47 million tonnes in June, up 1.7% year-on-year. Production fell just below the record high of 70.65 million tonnes reached in March. Meanwhile, the country's total steel production in the first half of this year was down 1.1% at 399.56 million tonnes. The growth in production is primarily due to the activity due to the rise in steel prices.