Smelter maintenance, battery production cuts to keep lead prices rangebound in Jun

SHANGHAI, Jun 6 (SMM) – Shanghai lead prices are expected to remain rangebound in June as smelter maintenance lowers supply and as production cuts at lead-acid battery producers lowers demand.

The latest SMM survey showed that a slew of primary lead smelters will conduct maintenance in June. This is set to lower supplies of primary lead, and offer support to prices.

Those smelters included Guangxi Hechi Nanfang, Chifengshan Gold, Silver & Lead, Hunan Shuikoushan, West Ming, Hunan Jingui Silver Industry, Hanzhong Zinc Industry and Shandong Humon.

Some large lead-acid battery producers began output cutbacks in June, which clouded the demand outlook for lead, and will weigh on prices.

Despite maintenance at smelters mentioned above, the average operating rate across primary lead smelters across Henan, Hunan and Yunnan expanded 1.2 percentage points from the previous week to stand at 60.6% between June 3-6.

The rate for smelters in Henan rose 5.7 percentage points to 82.3% this week, as ample crude lead supplies allowed smelters, such as Shibin plant, to recover production. Higher output at some plants, such as Yuguang, also helped lift the average operating rate across Henan this week.

Some smelters in Yunnan also saw greater output this week, resulting in an increase of 2.6 percentage points in operating rates across the region, which averaged 39.5% this week.

Operating rates across primary lead smelters in Hunan dropped 7.5 percentage points to 37.3% this week, as Jingui began maintenance at its refining stage from the crude steel production line, and as some smelters slashed production.