Henan secondary lead production recovers from anti-smog curbs

SHANGHAI, Oct 11 (SMM) – Secondary lead smelters in north-central China’s Henan province have recovered production from anti-smog measures, as firm lead prices and stable battery scrap prices lead to decent profits, showed an SMM survey.

Operating rates across licensed smelters of secondary lead in Jiangsu, Anhui and Henan provinces averaged 46.5% in the week ending October 11, up 5.9 percentage points from the week ending September 27.

Henan contributed to the increase in the average operating rate, as the rates in Jiangsu and Anhui remained unchanged at 58.3% and 40%, respectively.

The rate in Henan stood at 40.7% this week, up 23.8 percentage points from the week before the National Day holiday when the government required local smelters to scale back operations to combat air pollution.

SMM learned that Henan’s Yuguang Gold & Lead, top lead producer in China, and Huarui smelter in Xinxiang county have recovered their operations. Huarui said that it may rein in production again this month, in view of poor air quality.

Jinli smelter in Henan has yet resumed one of its two battery breaking lines.

SMM calculations showed that secondary lead smelters could see a profit of 700-800 yuan/mt if they use battery scrap as feedstock to produce refined secondary lead.

The profit, together with worries about the future market, kept smelters keen to discharge their cargoes, while demand from downstream consumers, lead-acid battery producers was limited by existing stockpiles from pre-holiday purchases.

As of October 11, secondary refined lead was traded in a wider discount of 200-350 yuan/mt against the average of SMM 1# lead, ex-factory.