SHANGHAI, Jan. 14 (SMM) –
Data from the China Nonferrous Metals Industry Association (CNIA) showed China’s lead concentrate output during November was 257,600 mt (lead content), down 0.3% from the 258,300 mt recorded in October, and the lowest monthly output since April 2012. Output for the first 11 months of 2012 totaled 2.66 million mt (lead content), up 18.83% YoY.
Three reasons are behind the decline in lead concentrate output during November. First, the average #1 lead price during November was down by 3% from October’s RMB 15,397/mt, falling to RMB 14,900/mt and weighing down lead concentrate prices, as well as discouraging mines, especially smaller scale ones, from producing. Second, depressed lead demand from lead-acid battery producers resulted in poor sales at primary lead smelters, and combined with tight financing and ample raw material inventories built earlier, smelters curtailed purchases of lead concentrate. Third, most mines in north China which lack heating systems suspended production for the winter. According to CNIA, lead concentrate output in Inner Mongolia during November fell sharply by 11.92% MoM to 60,700 mt.
Domestic lead concentrate output in Hunan province, a major lead concentrate production base for China, was only 45,800 mt (lead content) during November, down 10.22% MoM. Output in Sichuan and Yunnan provinces was 23,000 mt and 18,000 mt, respectively, up 25.3% and 39.88% MoM. The sharp increase in output from Yunnan province was due to the resumption of operations at the Maoping Mine of Yiliang Chihong Mining.
According to CNIA, China produced 441,900 mt in refined lead during November, down 1.54% from the previous month. Refined lead output for the first 11 months of 2012 totaled 4.41 million mt, up 12.66% YoY.
Primary lead output during November was only down 482 mt MoM and basically flat at October’s level. Primary lead output in Henan province, a major production region, fell 4.57% MoM since output from Yongning Gold & Lead was cut by 1,500 mt due to maintenance. Output in Yunnan province also fell by 17.21% MoM due mainly to a combined drop in output of 5,000 mt at Shadian Electro-Metallurgy, Mengzi Mining, and Zhenxing Lead. Shuikoushan Nonferrous Metal reported an increase of 3,600 mt in primary lead output, contributing to the 12.17% growth in output in Hunan province. The recovery in production at Ningxia Tianma Metallurgical pushed up output in Ningxia by 46.98%. Guangxi’s output was also up 17.61% MoM due to strong output at Chengyuan Mining & Smelting and Nanfang Nonferrous Metal.
Secondary lead output during November fell by 5.35% MoM to 113,500 mt. Secondary output in Jiangsu province was down sharply by 10,000 mt, or 96.52%. SMM’s survey showed primary lead production at Jiangsu Chunxing Alloys remained normal during November with output holding steady.