Secondary lead smelters operate at lower rate amid thinner profits in Jan

SHANGHAI, Feb 20 (SMM) – Falling prices of lead and relatively firm offers of battery scrap as raw materials eroded profits at secondary lead smelters in January, and lowered their operating rate by 4.19 percentage points from December, to 50.34% last month, an SMM survey found. 

The lower rate reduced output at those surveyed smelters, to 145,500 mt in January, down 12,100 mt on the month. 

Supply shortage of battery scrap kept its prices stable in January, SMM learned. Most secondary smelters who own production licences closed for CNY at the end of last month while those without licences shut in the second half of January. This also accounted for the lower rate in January.  

The SMM survey showed that large-sized secondary smelters, with an annualised capacity above 100,000 mt, operated at 52.17% in January. This stood lower from December as maintenance at Anhui Huaxin, CNY breaks at Guangdong Xinsheng Technology and Shandong Zhongqing affected production. 

Thinner profits drove Jiangxi Jiujiang Huijin and Guizhou Sanhe into CNY closure earlier than the previous years, and this lowered the average operating rate across surveyed medium-sized smelters to 44.71%. Those secondary smelters have a capacity between 50,000 mt and 100,000 mt. 

Similarly, earlier-than-usual breaks at Henan Xinxiang Huarui and Tianjin Dongbang smelters depressed operating rate across small secondary smelters, to 67.14% in January. 

Surveyed secondary smelters covered a capacity of 3.47 million mt in January, after an SMM adjustment in the sample.