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SMM Pb Survey: Average Operating Rate at Secondary Lead Smelters up in February
Mar 19,2012 11:42CST
smm insight
Source:SMM
An SMM survey of 12 major domestic secondary lead smelters (total capacity: 1.685 million mt/yr) revealed the following insights:

SHANGHAI, Mar. 19 (SMM) – An SMM survey of 12 major domestic secondary lead smelters (total capacity: 1.685 million mt/yr) revealed the following insights:

1) Average Operating Rate at Secondary Lead Smelters up 14 % in February
According to the SMM survey, the average operating rate at the surveyed secondary lead smelters rose sharply to 42% in February, up 14% from January.

With lead-acid battery producers resuming production in February, operating rates at secondary lead smelters were driven up by strong demand for secondary lead and lead alloy products. February is the traditional peak demand season for start-up lead-acid batteries used for automobiles and motorcycles, and although demand for start-up lead-acid batteries was not as strong as expected, many enterprises were still actively producing. Production at motive lead-acid battery producers was also recovering as labor shortages ease and as existing battery inventories are consumed. Purchases of secondary lead and lead alloys improved due to the resumption of operations at lead-acid battery producers, with average operating rates at secondary lead smelters rising as a result.

In February, operating rates at smelters varied by size. Operating rates at smaller smelters with capacities less than 100,000 mt/yr rose significantly, helping drive up the overall average operating rate, and with the greatest contribution from enterprises which had closed for the Chinese New Year holiday.

The average operating rate was still low at 42% despite the growth in operating rates. Environmental protection inspections held in Shandong, Anhui, and Hebei provinces were considered to be quite strict, so production at some of these smelters was constrained by the inspections. In addition, high prices for scrap batteries used as raw materials for secondary lead production were also keeping operating rates low.

2) Secondary Lead Supply in Shandong and Jiangsu Province Below Expectations
It was reported that secondary lead supply in some provinces, including Shandong and Jiangsu, fell short of demand from lead-acid battery producers since production at local secondary lead smelters was constrained by strict environmental protection inspections.

The environmental protection inspections remain strict this year due to a series of heavy metal pollution incidents, which is also making secondary lead smelters the focus of renovation. Many smelters in Shandong, Anhui, and Jiangsu provinces have halted or cut output due to the ongoing inspections, limiting operating rates. In addition, as prices of scrap batteries remained high, combined with relatively high costs for labor and clean production, some small secondary lead smelters limited production due to current narrow profit margins.

On the other hand, secondary lead supply in markets was limited just as labor shortages were easing, which allowed for increased production at lead-acid battery producers and improved demand for secondary lead.

SMM survey
secondary lead smelter
operating rate

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