Copper Concentrate Imports by China Climb to Record as Fees, Output Gain.

China’s imports of copper concentrate, the world’s second-largest after Japan, climbed to a record in September as smelters ramped up production in response to rising treatment charges.

Inbound shipments jumped to 683,523 metric tons last month, up 22 percent from a year earlier, the Beijing-based customs office said today. That’s a record, according to Fu Bin, an analyst at Jinrui Futures Co., a unit of Jiangxi Copper Co., China’s biggest producer.

“The utilization rate has picked up since the end of summer,” said Zhu Lin, an analyst at Shanghai Metals Market.

Copper output in China increased in September for the first time in three months to 405,000 tons, up 3.3 percent from a year earlier, the National Bureau of Statistics said on Oct. 21. Output was 397,000 tons in August. China is the top user of the metal used in construction and household appliances.

“A part of the concentrate imports are probably long-term orders, while rising treatment charges have also improved the profit margins of smelters and encouraged them to buy more,” said Liu Biyuan, an analyst at GF Futures Co.

Spot fees paid to smelters in China by mining companies for turning ore into refined metal have nearly tripled to as much as $80 a ton for smelting and 8 cents a pound for refining, from about $20 to $30 a ton a month ago and nearly zero in June amid an ore shortage, Shenzhen Rongtuo Trading Co.’s Pang Ying said Oct. 13.

Treatment Fees

Smelters in China were able to charge more for processing ore from miners as demand for the refined metal dropped following a rally in prices, and supply of the scrap metal improved, according to Fang Junfeng, an analyst at China International Futures (Shanghai) Co.

Copper for three-month delivery on the London Metal Exchange rose 23 percent in the three months to September as a weaker dollar prompted investors to seek alternative investments. The metal rose as much as 2.6 percent to $8,549 a ton today, the highest price since July 2008.

Treatment fees in China also rose as counterparts in Japan and India reduced output, said Fang. Sterlite Industries (India) Ltd., India’s largest producer, has been granted an extension to run its sole 400,000-ton smelter until mid-December pending an environmental investigation.

Source : bloomberg.com