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China Official PMI at 18-Month High, Lead and Zinc Smelters Report Thin Margin

iconNov 4, 2013 08:21
Source:SMM
China’s official manufacturing PMI released by China Federation of Logistics & Purchasing advanced 0.3 percentage point to 51.4% in October.

SHANGHAI, Nov. 4 (SMM) – China’s official manufacturing PMI released by China Federation of Logistics & Purchasing advanced 0.3 percentage point to 51.4% in October, hitting an 18 month high and staying above 50% for a 13th month straight. Analyst Zhang Liqun believed the higher index in October presaged the stabilization of China’s growth. However, the lower sub-indices for finished goods stocks and purchase price indicated that enterprises remained cautious towards market prospects. 

Institutions both at home and overseas are optimistic to China’s economic outlook ahead of the Third Plenary Session of the CPC Central Committee. 
 
Lead and Zinc Smelters at Brink of Loss
The low prices and raw material shortage have left Chinese lead and zinc smelters at the brink of loss, said, Peng Tao, deputy secretary at lead and zinc branch of China Nonferrous Metals Industry Association.
 
Peng added that China’s lead and zinc industry realized 7.45 billion yuan in profit through the first seven months this year, up a mere 0.5% from a year ago, to account for only 10.9% of profits at large nonferrous metals industry. Of them, the 606 enterprises engaging in mining and dressing operations created 7.25 billion yuan in profit, down 5.4% from a year earlier. Total profit at the 482 smelters was 200 million yuan. 
 
As TC for concentrate remained low, 95% of profit at smelters came from precious metals, while profit margin from smelters’ major businesses was only around 1%. Operating rates at lead and zinc smelters were also low, which was particularly evident for those small ones. 
 
China manufacturing PMI
lead and zinc smelters

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