RPT-UPDATE 2-China metals output growth double digits, to slow

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By Polly Yam

HONG KONG, Jan 25 (Reuters) - China's industrial metals
production showed breath-taking rises in 2007, but this headlong
expansion is set to slow in 2008 after as power shortages,
efforts to cool investment and an uncertain economic environment
start to bite.

Copper and aluminium production in the world's top consumer
of these metals grew by double digits in 2007, data on Friday
showed, but industry sources said rates will be down this year,
while growth in lead and zinc will come to a virtual standstill.

For details of metals output, please see table
[ID:nBJE000024]

China, the world's biggest producer of aluminium, lead, zinc
and tin, produced 3.4 million tonnes of refined copper in 2007,
up 18 percent from the previous year, according to data from the
National Bureau of Statistics.

Yang Changhua, an analyst at Antaike, a state-owned research
group controlled by the China Nonferrous Metals Industry
Association, said copper output would rise 13 percent to 3.9
million tonnes in 2008 as new capacity added last year gets up to
full speed.

But China will remain reliant on the world market as
consumption is expected to expand 7 percent to 4.88 million
tonnes this year, Antaike said. Of that, 4.84 million tonnes
would be real consumption and 40,000 tonnes would be for stocks.

The latest data also highlighted China's depence on imported
ores to feed its metals industry.

China's copper mines only covered 25 percent of its needs
last year, producing 856,300 tonnes of copper in ore.

ALUMINIUM GROWTH SLOWS

Power shortages, believed to be the country's worst ever,
could slow output growth this year to 22 percent to an estimated
15.0-15.5 million tonnes, from 12.3 million tonnes in 2007, out
of a capacity of 16 million tonnes estimated by industry
officials.

Some 600,000 tonnes of power-hungry aluminium capacity,
including 510,000 tonnes at two plants controlled by Aluminum
Corp of China Ltd (Chalco) (2600.HK) (601600.SS), has halted
production this week due to power shortage in southwestern
Guizhou province, where pylons providing electricity to a major
power network were damaged by heavy snow.

Output of alumina, the main material for primary aluminium
production, rose 47.7 percent to 19,507,900 tonnes last year and
covered 80 percent of the country's needs, cutting demand for
imports.

Alumina output could continue to rise this year on new
capacity.

Chalco's 33-percent owned 1.6 million-tonne-a-year Huayin
alumina refinery in Guangxi is expected to reach full production
this year and its Pingguo plant's new 880,000 tonnes alumina
capacity is scheduled to start production in mid-2008.

In 2008, zinc output may rise by about 150,000 tonnes or just
4 percent, after surging 18 percent in 2007.

"Output should be below 4 million tonnes this year," said
Wang Jianjun, head of international trade at Zhuye Torch
(600961.SS), the top zinc producer in China, adding that power
shortages were likely to affect zinc smelters as well and
aluminium makers.

Refined lead output rose to 2,717,500 tonnes in 2007, up 7
percent, but may rise only 3 percent this year due to low exports
and limited supply of ores, Tang Chenghe, chairman of Anyang
Yubei Gold and Lead said.

Tang said exports would stay low this year because of a 10
percent tax, even though about 600,000 tonnes of new capacity was
added in 2007.

Tin output rose 7.4 percent on the year to 149,102 tonnes in
2007 versus 2006's revised 138,884 tonnes.
(Additional reporting by Lucy Hornby in Beijing; editing by
Michael Urquhart)