March 8 (Bloomberg) -- Supplies of lead from China, the world's largest producer of the refined metal, will decline as the government raises environmental standards for plants, said Hunan Nonferrous Metals Corp.
Demand for the metal, used in batteries, will keep rising because of consumption by the auto industry, said He Renchun, president of China's largest producer of zinc, in an interview today. The company owns lead mines.
"The government will probably raise environmental standards for lead producers, which will reduce supplies and boost prices," said He, who's in Beijing for the country's parliamentary meetings.
China increased lead production to a record last year as the government's 4 trillion yuan ($586 billion) stimulus plan spurred sales of autos. The government has struggled to implement safety standards, with thousands of children poisoned by lead, zinc and manganese plants in Yunnan, Henan, Shaanxi and Hunan provinces last year.
Lead prices in London rose 2.2 percent to $2,280 a metric ton at 9:47 a.m. local time. Futures of zinc, used to galvanize steel, gained 1.9 percent to $2,394 a ton on the London Metal Exchange.
"China's zinc demand will grow by more than 10 percent this year as economic growth of 8 percent will continue to boost demand from automakers and builders," He also said. The nation is also the world's biggest consumer of zinc.
Premier Wen Jiabao has set an economic growth target of 8 percent for China this year. Wen in January ordered "specific" targets for trimming capacity in some industries including steel, coal and metals. Economic growth accelerated 10.7 percent in the fourth quarter, the fastest pace since 2007, spurring concerns about industrial overcapacity.