China's primary lead production recovered as expected in Oct

SHANGHAI, Nov 8 (SMM) – Primary lead output in China rebounded as expected in October as a slew of smelters recovered from maintenance, which included Jiangxi Copper, Xing’an Silver & Lead and Yunnan Mengzi. The supply growth from resumption exceeded 15,000 mt, SMM assessed. 

SMM data showed that domestic output of primary lead stood at 261,000 mt in October, up 4.6% from September and 2.2% from October 2018. Production in the first ten months of this year was 0.7% higher than the same period a year ago.

Emergency alerts for heavy pollution weather at the start and end of October in north China limitedly affected output as major producers had in-plant stocks of crude lead, the feedstock to produce refined lead. SMM learned that some smelters in Hebei and Henan provinces faced production curbs over the smog-alert period last month. 

SMM expects domestic production of primary lead to extend a rally in November, as Henan Jinli, Xing’an Silver & Lead and Haicheng Chengxin resume after overhaul. 

Greater inflows of seaborne lead concentrate lifted quotes of treatment charges (TCs) to $90-120/dmt for Pb 60% lead concentrate for November. This will improve margins at lead smelters and encourage their production enthusiasm despite weakness in lead prices. 

SMM assessments indicated that, as of November 8, TCs for domestic Pb 50% lead concentrate stood at 2,000 yuan/mt, with a high of 2,200 yuan/mt, both on a metal content basis. 

Scheduled maintenance at Hunan Jingui, Henan Xinling, and Yunnan Chihong will cap the increase in primary lead output in November.