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September’s Average Operating Rate at Primary Lead Smelters Up 5.34%
Oct 16,2012 17:21CST
smm insight
Source:SMM
SMM’s recent survey showed that the average operating rate at China’s major primary lead smelters rose in September to 66.5%.

SHANGHAI, Oct. 16 (SMM) – SMM’s recent survey showed that the average operating rate at China’s major primary lead smelters rose in September to 66.5%, up 5.34% MoM, and with total refined lead output at the 43 surveyed primary lead smelters reaching 221,100 mt.

The average operating rate during September at larger smelters with capacities above 100,000 mt/yr rose 8.73% to 86.9%, while rates at medium smelters with capacities between 50,000-100,000 mt/yr averaged 57.04%, up 4.99% MoM. Output at small smelters fell sharply, with the average operating rate down 13.44% MoM.

During September, markets responded to favorable news, including the European Central Bank’s unlimited bond-buying plan, the approval of the ESM by Germany’s top court, and the launch of QE3, all of which helped push up the average spot lead price to RMB 15,530/mt from   the August average of RMB 15,040/mt, which encouraged large and medium primary lead smelters to increase operating rates. In addition, Anhui Tongguan, Yunnan Tin Industry, Hechi Nanfang Nonferrous Metals, Chengyuan Mining & Smelting, and Gejiu Shadian Non-ferrous Metals also resumed production as prices rose. Yubei Gold & Lead’s production line which came online on August 7th also began normal production in September, doubling the company’s refined lead output for the month. Output at Anyang Minshan Nonferrous Metal, Jiangxi Jinde Lead Industry, Zhenxing Lead Industry, and Huludao Zinc Industry also saw increases in September output as maintenance was completed. Despite maintenance during September at Inner Mongolia Xingan Silver Lead, Baiyin Nonferrous Metal, and Western Mining, lead output was little affected since the first two companies only conducted limited maintenance and since normal output at Western Mining is low.

The average operating rate at small primary lead smelters fell sharply in August by 13.91% MoM and again in September by 13.44% MoM, to an average rate of 31.52%. Given the lack of improvement in demand for lead-acid batteries, small smelters showed low risk tolerance and many were choosing to limit production or conduct maintenance, especially in the Gejiu and Mengzi regions of Yunnan province. In October, the Yunnan provincial government implemented new tax policies designed to defer deductions for input VAT. These new policies may have a significant impact on production at smelters and will likely cause refined lead output from Gejiu and Mengzi to fall.
 

average operating rate at smelters
China primary lead smelters

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