China Refined Lead Production Seen up 10 pct in H2-Shanghai Metals Market

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China Refined Lead Production Seen up 10 pct in H2

Industry News 02:33:32PM Jul 26, 2012 Source:SMM

* Output in H2 seen up by about 260,000 tonnes from H1
* Increased output likely to keep pressure on imports
* Demand seen supporting domestic prices for spot lead

HONG KONG, July 25 (Reuters) - China's production of refined lead is expected to rise by about 10 percent or 260,000 tonnes in the second half from the first six months of the year, industry sources said, as new capacity comes onstream amid growing demand from battery manufacturers.

Higher production of refined lead, which reached a record 459,000 tonnes in June, means imports are unlikely to grow for much of the second half after falling 7.5 percent from a year earlier in the first half, although traders had hoped weak prices on the London Metal Exchange would spur purchases by China.

The increased output is also unlikely to pressure prices of spot lead in the world's top producer and consumer of the metal, with support from rising demand in the second half, sources at smelters said.

Hu Yongda, an analyst at state-backed research firm Antaike, estimated that official data for refined lead production would reach 4.8 million tonnes by the end of the year.

His forecast puts second-half output at up to 2.53 million tonnes, compared with recorded output of 2.27 million tonnes for the first half.

Demand for lead acid batteries is expected to account for about 70 percent of China's refined lead consumption this year, estimated at more than 4.4 million tonnes.

Official data in June showed production of lead-acid batteries jumped 71.5 percent from a year earlier, and rose 9.8 percent from a month-earlier high for the year of 16.83 million kilowatt-hours (kWh).

Production of electric bicycles, which traditionally peaks during summer months, driving demand for lead-acid batteries, rose to a high for the year of 1.82 million units in June, up 30.9 percent from a year earlier.

Demand for batteries is also expected to be supported in the fourth quarter when cold winter weather sees a peak in sales of replacement car batteries, analysts and sources at smelters said.

"Lead demand in H2 will be better than the first half," said a sales manager at a large lead smelter in Henan, adding that smelters in Henan, the country's top lead-producing province, held almost no stocks and were keen to produce.

The Ministry of Industry and Information Technology has forecast the country's economic growth to rise in the second half as a raft of policies rolled out to boost economic activity gain traction.

"Our production will rise in the second half," said a senior executive at smelter Anyang Yubei Gold and Lead. "Demand is quite strong currently. We have decided to start our new 120,000-tonne production line this month."

Traders and sources at smelters said there was also a plentiful supply of lead concentrate to support strong production, with June output at a record 395,000 tonnes of metal in concentrate.
Antaike's Hu said that with hefty profit margins at about 3,000 yuan ($470) per tonne, domestic lead miners were keen to produce concentrate. ($1 = 6.3858 yuan)
 

China Refined Lead Production Seen up 10 pct in H2

Industry News 02:33:32PM Jul 26, 2012 Source:SMM

* Output in H2 seen up by about 260,000 tonnes from H1
* Increased output likely to keep pressure on imports
* Demand seen supporting domestic prices for spot lead

HONG KONG, July 25 (Reuters) - China's production of refined lead is expected to rise by about 10 percent or 260,000 tonnes in the second half from the first six months of the year, industry sources said, as new capacity comes onstream amid growing demand from battery manufacturers.

Higher production of refined lead, which reached a record 459,000 tonnes in June, means imports are unlikely to grow for much of the second half after falling 7.5 percent from a year earlier in the first half, although traders had hoped weak prices on the London Metal Exchange would spur purchases by China.

The increased output is also unlikely to pressure prices of spot lead in the world's top producer and consumer of the metal, with support from rising demand in the second half, sources at smelters said.

Hu Yongda, an analyst at state-backed research firm Antaike, estimated that official data for refined lead production would reach 4.8 million tonnes by the end of the year.

His forecast puts second-half output at up to 2.53 million tonnes, compared with recorded output of 2.27 million tonnes for the first half.

Demand for lead acid batteries is expected to account for about 70 percent of China's refined lead consumption this year, estimated at more than 4.4 million tonnes.

Official data in June showed production of lead-acid batteries jumped 71.5 percent from a year earlier, and rose 9.8 percent from a month-earlier high for the year of 16.83 million kilowatt-hours (kWh).

Production of electric bicycles, which traditionally peaks during summer months, driving demand for lead-acid batteries, rose to a high for the year of 1.82 million units in June, up 30.9 percent from a year earlier.

Demand for batteries is also expected to be supported in the fourth quarter when cold winter weather sees a peak in sales of replacement car batteries, analysts and sources at smelters said.

"Lead demand in H2 will be better than the first half," said a sales manager at a large lead smelter in Henan, adding that smelters in Henan, the country's top lead-producing province, held almost no stocks and were keen to produce.

The Ministry of Industry and Information Technology has forecast the country's economic growth to rise in the second half as a raft of policies rolled out to boost economic activity gain traction.

"Our production will rise in the second half," said a senior executive at smelter Anyang Yubei Gold and Lead. "Demand is quite strong currently. We have decided to start our new 120,000-tonne production line this month."

Traders and sources at smelters said there was also a plentiful supply of lead concentrate to support strong production, with June output at a record 395,000 tonnes of metal in concentrate.
Antaike's Hu said that with hefty profit margins at about 3,000 yuan ($470) per tonne, domestic lead miners were keen to produce concentrate. ($1 = 6.3858 yuan)