China Pb Import Data Analysis in July 2012

SHANGHAI, Aug. 28 (SMM) –

Lead concentrate
Data from China Customs showed China’s lead concentrate imports in July staged a 1.09-fold increase from June to 167,900 mt. YTD imports through July amounted to 925,400 mt, up 23.24% YoY.

Peru, Australia, the US, and Russia were China’s major suppliers of lead concentrate during July, with 60% of imports from those four countries and increasing from June levels. The remaining 40% of supply came mainly from Kazakhstan, Mexico, Turkey, and South Africa.

During June, no imports from the US were reported, but both smelters and traders reported increased concentrate supply, so SMM expected these imports will be reflected in import figures released later after taking into consideration shipping times and customs clearances. The data for July confirmed SMM’s estimate.

LME lead prices fell sharply in June, down from USD 1,903/mt to a low of USD 1,742/mt, or a loss of 8%. Domestic spot lead prices, however, were more resilient, but still fell by 3%, driving the Shanghai/LME lead price ratio to a high of 8.47 and allowing larger profits for importing lead concentrate and encouraging smelters to import. SMM believes goods reported arriving in July were actually imported in June.

Since South China experienced heavy rains in June, drainage systems at many small mines in major lead concentrate production bases such as Sichuan, Hunan, Guangdong, Guangxi, Yunnan and Fujian were limiting mining and dressing processes, prompting smelters to seek imports. .

Refined lead
According to data from China Customs, China’s refined lead imports in July rose 8.27% to 445 mt, and with YTD imports through July reaching 4,599 mt, down 3.02% YoY.

Over 50% of July’s lead imports were from South Korea, with the remainder from Ukraine. Given the relatively short shipping time, imports from South Korea are immediately reflected in customs data, but since goods from Ukraine require almost one month to arrive, refined lead arrived at ports in July might have been ordered in June.

The increase in refined lead imports in July was attributable to a higher Shanghai/LME lead price ratio, whose 8.47 level was last seen in 2H 2010.

SMM’s most recent survey revealed that operating rates at smelters fell from 63.67% in May to 54.96% in July since an increasing number of smelters conducted maintenance. The limited supply of domestic lead forced some enterprises to increase lead imports.