SHANGHAI, Mar. 18 (SMM) – The average operating rate at major Chinese primary lead smelters was unchanged during February at 58.36%, the latest SMM survey shows.

SMM surveyed 49 smelters with a total capacity of 4.71-million tpy, and which produced 211,400 tonnes of refined lead.

The rate at large smelters with capacities above 100,000 tpy rose sharply during February to 83.44%, up 4.03 percentage points from January’s average of 79.41%. The rate at medium-size smelters with capacities between 50,000-100,000 tpy, however, fell sharply to 45.02%, down 2.21 percentage points from January’s 47.32%. Finally, the average operating rate at small smelters with capacities below 50,000 tpy was basically unchanged at 35.85%.

Conditions facing primary lead smelters were mixed during February. SMM #1 lead prices fell from slightly above 14,000 yuan per tonne to around 13,800 yuan per tonne, and at the same time TC for lead concentrate (Pb 50%) also fell to a low of 1,600-1,700 yuan per tonne. Both of these declines acted to restrain primary lead output. Despite negative factors, growing production enthusiasm at smelters was driven by expectations that lead-acid battery producers would conduct restocking given relatively low raw material inventories before the Chinese New Year holiday.

Based on the survey, few large scale smelters halted production or began maintenance during February since they had sufficient liquidity and raw material stocks. Although Henan Yuguang Gold & Lead, Jiyuan Wanyang Smelter Group, Shuikoushan Nonferrous Metals, and Anyang Minshan Nonferrous Metal cut lead output by a total of nearly 10,000 tonnes, Jinli Lead Industry, Anyang Yubei Gold and Lead, and Chenzhou City Jingui Silver offset the loss by increasing output.

A considerable number of small and medium-size lead smelters, however, began maintenance during February. Xinling Refining, Henan Zhicheng Gold & Lead, Hunan Zhantai Non-Ferrous Metals, Dongling Lead & Zinc Smelting, Shibin Lead, Hunan Zhantai Non-Ferrous Metals, all contributed to a total loss of nearly 13,000 tonnes in output. Despite output increases at Chihong Zn & Ge, Hunan Guiyang Yinxing Nonferrous Smelting, Luoyang Yongning Gold & Lead Refining, and Yunnan Zhenxing Lead Industry, the average operating rate at these small and medium-size smelters still trended down. SMM sources said a number of small smelters, particularly in Henan and Yunnan provinces, suspended production during February, limiting supply and leaving lead prices in these regions fairly firm compared to Shanghai market prices.