China aluminium, copper output at record in Sept

* Refined copper output up 20.5 pct yr/yr, 8 pct from August * Lead output down 6.3 pct on month, tin down 15.4 pct * Aluminium output at record, above 1.2 mln t for first time By Tom Miles and Nick Trevethan BEIJING/SINGAPORE, Oct 22 (Reuters) - China's production of refined copper and aluminium hit a fresh monthly record in September, while lead output dipped slightly after a spate of poisoning scandals, official data showed on Thursday. The latest base metal production figures showed that domestic smelters and miners in the world's top copper and aluminium consumer responded quickly to sustained higher prices, news that may be read either as reinforcing the China demand recovery story or as raising warnings about the potential for oversupply. "High output, imports and inventories all indicate strong market expectation on the metal. The government incentives to telecommunications and home appliances are still supporting copper consumption," Li Ye, analyst with Star Futures, said. Copper output hit a record 394,800 tonnes in September, up 8.2 percent from August and more than 20 percent versus a year ago, when industrial output was succumbing to a global slowdown, data from the National Bureau of Statistics showed on Thursday. The surge in production was the second surprise of the month from China's copper market, after imports of unwrought copper unexpectedly jumped to 399,052 tonnes, up 23 percent from August. Analysts had expected copper output to exceed last September's 317,000 tonnes but to slip from August's 364,900 tonnes, particularly after the surprise trade data, but China's robust demand has confounded expectations. The case for China's aluminium demand is even weaker, since China is normally a net exporter, but exports have collapsed this year while domestic production has forged ahead, supported by state buying, local government programmes, loose credit and a $586 billion government stimulus programme. But, like China's steel mills, smelters shrugged off worries about oversupply, taking monthly output of primary aluminium above 1.2 million tonnes for the first time, up 5.6 percent from August and 7.6 percent from September 2008. ALUMINIUM REBOUND The latest record caps a 33 percent rebound in aluminium production, which barely rose above 900,000 tonnes a month in the first four months of the year, despite warnings of oversupply. "A lot of metals capacity was taken off-line when things crashed but gradually that has been switched on and they have done a good job of not disrupting world markets," said Ben Westmore, commodities economist at National Australia Bank. But he added that the aluminium industry could suffer as firm prices encourage even more high-cost capacity to fire up. "Beijing's policies are having an adverse consequence. They had tried to prop up the industry locally, but given the abundance of aluminium supply, prices will face an uphill battle. "That will mean lower incomes and possibly renewed rationalization and the risk to employment. They will have to decide whether the long-term consequences were worth the short-term benefits." Adding to supplies are an aluminium project with capacity of 150,000 tonnes, due to start soon in Inner Mongolia, and Aostar Aluminium in Sichuan province, which resumed half of its production of 62,500 tonnes this month, said Tong Changzheng, an analyst at Great Wall Futures. Analysts were also closely tracking production of lead, which fell 6.3 percent on the month to 364,800 tonnes, the lowest since May, but a less severe decline than some had braced for given the pressure on smelters to respond to growing local protests over a spate of lead poisoning cases. While industry officials say some smelters did close down in August, officials in the country's main lead smelting area, Jiyuan in Henan province, plan to keep lead smelters going while moving residents away. Tin production slumped 15.4 percent during the month to 10,458 tonnes, the slowest monthly production since February. Zinc output slipped 1.1 percent from August's record high production to 410,300 percent, still 19 percent up on last September's output. With plentiful supply of ores from China's zinc mines, the country's big smelters are running at 95 percent capacity, said Heng Kun, a researcher at Essence Securities. (Additional reporting by Beijing Newsroom; Editing by Jonathan Leff and Alex Richardson)