UPDATE 2-Japan H1 copper output to rise 4 pct on solid local demand, higher fees

Mon Apr 7, 2014 7:45am EDT

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(Releads, writes through adding background, data)
    By Yuka Obayashi
    TOKYO, April 7 (Reuters) - Copper output in Japan is
expected to rise 4.4 percent in the six months between April and
September from the same period last year, Reuters calculations
showed on Monday, driven by recovering local demand and higher
processing fees.
    Pan Pacific Copper (PPC), Japan's biggest copper smelter and
a unit of Japan's JX Holdings Inc, said it was aiming
for a 5.5 percent increase in its refined copper output for the
first half of the 2014 business year that started on April 1, to
meet strong demand at home and abroad including China.
    "We are boosting our output as domestic demand is likely to
stay solid with more infrastructure work to rebuild in the
northeastern region after the huge earthquake and tsunami and to
prepare for the Tokyo 2020 Olympics," Yoshihiro Nishiyama,
senior executive officer at PPC, told Reuters on Monday.
    Japan's local copper demand has been recovering as an 
increasing number of urban development projects, the
refurbishment of old infrastructure and the construction of
solar power plants have boosted electric cable demand. 
    Healthy demand for copper products used in automobiles is
another good sign for smelters, according to industry officials.
    PPC's Nishiyama said Japanese smelters have better financial
incentives to process more metals because of higher processing
fees and premiums.
    Late last year, PPC won its highest copper processing fees
in eight years in a deal with U.S. miner Freeport-McMoRan Copper
& Gold Inc, reflecting an anticipated growth in mine
supply. 
    The treatment and refining charges (TC/RCs) for Freeport
were set at $92 per tonne and 9.2 cents per pound respectively,
up 31 percent from $70 and 7 cents for 2013. 
    Separately, PPC set 2014 copper premiums for Chinese buyers
mostly at $123, up 45 percent from last year. 
    Other smelters also aim to boost their copper output for the
Apr-Sept half.
    Sumitomo Metal Mining Co Ltd, Japan's No.2 copper
producer, plans a 6.4 percent increase while Mitsubishi
Materials Corp targets a 1.2 percent rise.
    "Domestic copper demand is solid, especially for electric
wires used in infrastructure and solar power generators,"
Masanori Ohyama, general manager of copper & precious metals
sales at Sumitomo Metal, told Reuters last week.
    "We've practically sold out our refined copper for calendar
2014 through the long-term contracts," he said. 
    
    NO IMPACTS FROM CHILE EARTHQUAKE
    Both PPC and Sumitomo Metal, also copper miners, are set to
start production at new copper mines in Chile this year.
    PPC plans to begin producing copper concentrate at its
Caserones mine in May, while Sumitomo Metal, along with Poland's
KGHM, aims to start operations in Sierra Gorda mine in
the April-June quarter.
    PPC's Nishiyama said the major earthquake that struck last
week in Chile, the world's top copper producer, did not have any
impact on its Caserones mines or its procurement of copper
concentrates from the existing mines in the country. 
       
    Below are production plans for Apr-Sept, compared with
year-earlier output, of non-ferrous metals from Pan Pacific,
Sumitomo Metal, Mitsubishi Materials, Furukawa Co Ltd,
DOWA Holdings Co Ltd, Mitsui Mining and Smelting Co Ltd
, Nittetsu Mining Co Ltd and Toho Zinc Co Ltd
. (in tonnes)
    In Japan, most of companies start their business year on
April 1. 
                    H1       H2        H1   H1 Yr/Yr
               2014/15  2014/15   2013/14           
      COPPER                                        
 Pan Pacific   280,900     n.a.   266,300       5.5%
    Sumitomo   217,000  219,000   204,000       6.4%
  Mitsubishi   159,648     n.a.   157,788       1.2%
        DOWA    56,219     n.a.    55,809       0.7%
    Furukawa    46,907     n.a.    45,177       3.8%
   Nittetsu     23,106     n.a.    21,682       6.6%
        ZINC                                        
     Mitsui    105,400     n.a.   104,300       1.1%
        DOWA    85,605     n.a.    78,396       9.2%
   Toho Zinc    51,175     n.a.    53,533      -4.4%
    Sumitomo    23,500   26,500    25,600      -8.2%
  Mitsubishi         0        0     4,842       n.a.
        LEAD                                        
   Toho Zinc    47,900     n.a.    50,079      -4.4%
     Mitsui     32,100     n.a.    33,300      -3.6%
  Mitsubishi    14,880     n.a.    13,944       6.7%
        DOWA     6,752     n.a.     6,626       1.9%
      NICKEL                                        
    Sumitomo    28,200   29,500    22,400      25.9%
 FERRONICKEL                                        
    Sumitomo     9,800   11,600    10,000      -2.0%
 

 (Editing by Keiron Henderson)
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