SMM 2017 Lead & Zinc Summit: Lead Smelters Face Difficulties

SHANGHAI, May (22) – Supply and demand in lead market were both sluggish in the first half of 2017, and will those improve in the second half of the year? See answers on SMM 2017 Lead & Zinc Summit held on May 20.

SMM: How will lead industry develop in 2017?

Zhang Liangliang, Vice General Manager of Inner Mongolia Yindu Mining Industry Co., Ltd., expects the industry to improve in 2017, compared to 2016’s level, and lead price will average 16,000 yuan per tonne in 2017 with positive fundamentals.

Lead industry will maintain expanding territory, but lead concentrate supply and demand will not change sharply in China. Large amounts of high-pollution and high-energy consumption capacities have been clamped down, while some energy-saving and environmental projects start with enhancing environmental protection consciousness and massive recycling of secondary lead after release of Standard for Lead Industry 2013.

Lead smelters, getting profits mainly from composite recycling recent years, are suffering big losses in face of volatile precious metal price. Hence, lead smelters will slow down production in 2017 and find new production mode for higher profits. On the other hand, rising environmental requirement increases investment in new energy products, boosting lead-acid battery demand.

Collections of Stories in Base Metal Market at SMM 2017 Lead&Zinc Summit

SMM: More and more primary lead smelters expand secondary lead production, and how those smelters plan on new projects in 2017, or in next years?

Li Xiaoyong, Vice General Manager of Jiyuan Wanyang Group, said that about 10 primary lead smelters have new secondary lead projects with capacity at 80,000-100,000 tonnes per year, resulting in 1 million tonnes of battery scrap dismantling capacity and more than 600,000 tonnes of lead output. But, those projects are under proposal, and market participants will not see large amounts of new secondary lead projects in this year. Moreover, strict environmental checks, high industrial standard, financial restrain and tight battery scrap supply also restrict secondary lead production.

Zhou Yongjun, Vice General Manager of Henan Jinli Gold & Lead Co., Ltd., indicated that large amounts of lead-acid batteries have been eliminated with rising environmental consciousness. Lead smelters should attach importance to lead scrap recycling and secondary lead business, no matter how advanced primary lead industry may be.  

China’s secondary lead industry developed slowly for a long time, and most small secondary lead smelters, equipped backward facilities due to recycling channels, caused environmental pollution and resource waste. However, China’s battery scrap and recycling market has registered rapid growth in recent years with fiercer competition and complete legal environment, increasing secondary lead output, which reaching that of primary lead.

Jinli Gold & Lead produces secondary lead by lead paste from battery scrap after recycling with low energy consumption but high production. The company plans to expand secondary lead project with capacity at 200,000 tonnes. After the completion, secondary lead production will exceed 500,000 tonnes at the company.

SMM: China’s circular economy of lead industry chain develops quicker in 2017, and many domestic lead-acid battery producers have expanded secondary lead production. Will you have new construction plan for secondary lead, or schedule to put new projects into operations?

One lead-acid battery producer in east China indicated that China’s lead-acid battery industry has entered downward territory after reaching the peak at 230 million KVAh in 2014, and the industry will keep falling in 2017.

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