SMM Pb Survey: June Operating Rate at Secondary Lead Smelters Down-Shanghai Metals Market

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SMM Pb Survey: June Operating Rate at Secondary Lead Smelters Down

SMM Insight 06:10:18PM Jul 23, 2012 Source:SMM

SHANGHAI, Jul. 23 (SMM) – A recent SMM survey of 12 major domestic secondary lead smelters (total capacity: 1.885 million mt/yr) revealed the following insights:

SMM’s survey of 12 major domestic secondary lead smelters revealed the average operating rate during June at the surveyed smelters fell to 63.12%, dragged down by poor results from SMEs.

Lead prices during June were largely influenced by economic conditions, with LME lead prices dipping below USD 1,800/mt. Operating rates at electric vehicle battery producers edged up due to the improved orders during high demand season. Demand for ignition and backup batteries, as well as orders at secondary lead smelters, however, were negatively affected by slow global economic growth.

Demand for lead-acid batteries has fallen noticeably this year, which also resulted in fewer orders for secondary lead. Coupled with rigorous environmental protection inspections of the secondary lead industry and low lead prices, operating rates at smaller smelters fell during June by almost 5 percentage points. Operating rates at medium size smelters with capacities between 100,000-150,000 mt/yr also fell, while larger smelters with capacities above 150,000 mt/yr were able to maintain stable rates.

According to sources in several SMEs, since lead prices plunged while prices for raw materials were relatively stable, many enterprises were suffering from losses and were discouraged from maintaining stable production. During June, SMM’s price for #1 lead fell from RMB 15,100/mt to RMB 14,600/mt, but scrap prices fell much slower, down by only RMB 200/mt, to RMB 7,800/mt. Scrap battery sellers were reluctant to sell due to falling lead prices, so smelters were having difficulties obtaining raw materials. Smelters in Henan and Hebei provinces reported that most scrap recyclers were individuals who engaged in farm work during the June busy season, so scrap battery supply became even tighter during June.
 

SMM Pb Survey: June Operating Rate at Secondary Lead Smelters Down

SMM Insight 06:10:18PM Jul 23, 2012 Source:SMM

SHANGHAI, Jul. 23 (SMM) – A recent SMM survey of 12 major domestic secondary lead smelters (total capacity: 1.885 million mt/yr) revealed the following insights:

SMM’s survey of 12 major domestic secondary lead smelters revealed the average operating rate during June at the surveyed smelters fell to 63.12%, dragged down by poor results from SMEs.

Lead prices during June were largely influenced by economic conditions, with LME lead prices dipping below USD 1,800/mt. Operating rates at electric vehicle battery producers edged up due to the improved orders during high demand season. Demand for ignition and backup batteries, as well as orders at secondary lead smelters, however, were negatively affected by slow global economic growth.

Demand for lead-acid batteries has fallen noticeably this year, which also resulted in fewer orders for secondary lead. Coupled with rigorous environmental protection inspections of the secondary lead industry and low lead prices, operating rates at smaller smelters fell during June by almost 5 percentage points. Operating rates at medium size smelters with capacities between 100,000-150,000 mt/yr also fell, while larger smelters with capacities above 150,000 mt/yr were able to maintain stable rates.

According to sources in several SMEs, since lead prices plunged while prices for raw materials were relatively stable, many enterprises were suffering from losses and were discouraged from maintaining stable production. During June, SMM’s price for #1 lead fell from RMB 15,100/mt to RMB 14,600/mt, but scrap prices fell much slower, down by only RMB 200/mt, to RMB 7,800/mt. Scrap battery sellers were reluctant to sell due to falling lead prices, so smelters were having difficulties obtaining raw materials. Smelters in Henan and Hebei provinces reported that most scrap recyclers were individuals who engaged in farm work during the June busy season, so scrap battery supply became even tighter during June.