SHANGHAI, Feb. 26 (SMM) – SMM’s survey of 12 major Chinese secondary lead smelters revealed that operating rates during January averaged 60.46%, up 1.06 percentage points from December’s 59.4%.
The average operating rate at medium-size secondary lead smelters with capacities between 100,000-150,000 mt/yr rose sharply during January to 47.49%, an increase of 4.19% percentage points from December and helping raise the entire sector’s average rate. The average rate at large smelters with capacities exceeding 150,000 mt/yr was steady at 76.67%, while the average operating rate at smaller secondary lead smelters fell by 14.13 percentage points, to 42.39%.
SMM believes the higher operating rate in January was mainly driven by downstream replenishment. Secondary lead enterprises traditionally halt production during the Chinese New Year holiday and restart after the Lantern Festival on February 24th. This schedule forces lead-acid battery producers to replenish stocks before the holiday, pushing up secondary lead smelter operating rates during January. Among medium-size smelters, Jiangsu Chunxing Alloys, Guangdong Xinyu Iron & Steel, and Hubei Chukai Metallurgy all reported increases in their scrap battery purchases during January. Operating rates at larger smelters remained little changed since most were already producing at near full capacity.
The decline in operating rates at smaller smelters was due mainly to production halts starting in mid-January for the Chinese New Year holiday.