"Exports of both copper and zinc will increase this year compared with last year," said Atsushi Yamaguchi, an analyst at Jardine Fleming Securities (Asia) Ltd.

Yamaguchi said it was less profitable for smelters to export refined metals than to sell at home, where the industry is protected by import tariffs on base metals, but a shift to Asian markets was being forced by weak domestic demand.

In calendar 1998, Japan exported 269,864 tonnes of copper and 46,680 tonnes of zinc.

Smelters are also looking to raise output in order maintain their long-term competitiveness.

"Japanese smelters have been striving to boost production capacity to enhance competitiveness and cut costs," Mitsui Mining and Smelting Co Ltd president Shimpei Miyamura told Reuters in a recent interview.

"(If they cut output), smelters may not be able to cover fixed costs...and profits may fall." Japan's eight smelters released their semi-annual production schedules this week, forecasting a 2.7 per cent rise in copper production year-on-year to 668,833 tonnes in the first half of 1999/2000, which began on April 1.

Zinc output is projected to rise 7.4 per cent to 325,339 tonnes.Nippon Mining and Metals Co Ltd, Japan's top copper producer, will boost copper output after raising its annual refining capacity to 420,000 tonnes from 350,000 tonnes last December. That increased Japan's copper refining capacity to about 1.34 million tonnes a year, analysts said.

Nippon Mining plans to raise its half-year copper output by 13.6 per cent to 207,600 tonnes in the first half of 1999/2000 from a year earlier.

"Nippon Mining is very bullish.... Other firms are inclined to cut copper output slightly but there will be no big difference from their actual output a year ago," Yamaguchi said.

As for zinc, an official ata foreign trading company said: "Zinc output in Japan in particular will increase this fiscal year as refiners boost their production capacity." As a result, smelters will increase zinc exports to neighbouring countries when spot market prices rise, he said. Japanese zinc exports are mostly on a spot basis, he added.

Michio Kameno, a director at Mitsui Mining, told Reuters recently he expected Japanese zinc imports to fall sharply in 1999/2000 as the domestic refining industry has been boosting annual zinc output capacity, which is expected to reach 630,000 tonnes this year compared with 580,000 tonnes a few years ago.