Primary lead smelter operating rate dipped on lower production in Hunan

SHANGHAI, Nov 29 (SMM) – Operating rates across primary lead smelters in Henan, Hunan and Yunnan provinces averaged 57.9% in the week ending November 29, down 0.4 percentage point from the previous week, according to an SMM survey.

Hunan contributed to the dip in the average operating rate, due to a production cut at Yuteng smelter which is expected to extend into December. Primary lead smelters in Hunan operated at a rate of 44.3% this week, down 1.2 percentage points from the prior week.

Operating rates at Yunnan and Henan remained unchanged at 43.8% and 71.3%, respectively.

Henan activated an orange alert for smog on November 29, requiring some smelters to cut capacity of the smelting stage by 20-30%. This is likely to have little impact on production of refined lead, given sufficient stocks of lead bullion.

The Chinese lead market is likely to face stronger supply pressure in the coming month, as improved profits on higher treatment charges will encourage smelters to step up production, especially at year-end when smelters tend to rush to fulfill annual production targets.