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Average Operating Rate at Chinese Primary Lead Smelters Down to 57.01% in Mar.

iconApr 10, 2014 09:33
Source:SMM
The additional three working days and production cuts at many lead smelters caused average operating rate at major Chinese primary lead smelters to fall to 57.01% in March, an SMM survey showed.

SHANGHAI, Apr. 10 (SMM) – The additional three working days and production cuts at many lead smelters caused average operating rate at major Chinese primary lead smelters to fall to 57.01% in March, down 1.55 percentage points from February’s average of 58.56%, the latest SMM survey showed.

SMM surveyed 49 smelters with a total capacity of 4.705 million tpy, and which produced 227,800 tonnes of lead in March, up 16,400 tonnes from February.

The average rate at large smelters with capacities above 100,000 tpy fell 4.1 percentage points to 79.34% in March, down from February’s average of 83.44%. The rate at medium-size smelters with capacities between 50,000-100,000 tpy was virtually unchanged at 44.46%, but the rate at small smelters with capacities below 50,000 tpy rose by 5.18 percentage points to 57.13%.

Lead smelters resuming operations were outnumbered by those cutting output or entering maintenance cycles during March.

Those smelters in operation during the month had little incentive to raise output. Although around 5,000 tonnes in output was added at large smelters Anyang Minshan Nonferrous Metal Co. and Shuikoushan Nonferrous Metals Co., the amount was not able to raise total output above February levels. Henan Zhicheng Gold & Lead Co., Gejiu Shadian Hexing Lead Industry Co., and Jiyuan City Sinbin Electrolytric Lead Factory also combined to produce nearly 15,000 tonnes of refined lead after restarting operations, but even when added to another 5,000 tonnes in output from Zhuzhou Smelter Group, Jiangxi Copper Lead & Zinc Co., and Xiangyun Feilong Nonferrous Metal Co., several other smelters curtailing their production negated these gains. Output was down by a total of nearly 13,000 tonnes at Shandong Humon Smelting Co., Gejiu Shadian Electric Smelting Plant, Jiangxi Jinde Lead Industry Co., Dongling Lead & Zinc Smelting Co., Yunnan Zhenxing Lead Industry Co., and Xinling Refining Co.

Since March had more working days than February, the average operating rate at medium smelters was down. Xinjiang Shache Hengchang Smelting Co. restarted production, but some smaller smelters located largely in Yunnan’s Gejiu region reported widespread shutdowns.

The fall in March’s average operating rate was caused largely by low lead prices and tight raw material supply. SMM price for #1 lead fell by more than 200 yuan per tonne in March from February’s average price of 13,900 yuan per tonne, resulting in heavy losses at smelters. Meanwhile, lead concentrate supply became tight after the Shanghai/LME lead price ratio fell and gave importers little incentive to bring in goods, and when combined with work delays at domestic mines which reduced domestic supply, some smelters ran low on raw materials.

Since lead prices are expected to continue falling in April, Yunnan Chihong Zinc & Germanium Co., Nandan Nanfang Non-ferrous Metals Smelting Co., Guangxi Chengyuan Mining & Smelting Co., Haicheng Chengxin Nonferrous Metal Co., Hechi Xinhua Smelting Co. all started or had plans to conduct maintenance. Thus, the average operating rate is expected to fall in April despite the resumption of production at Shandong Humon Smelting Co. and Jiangxi Jinde Lead Industry Co.
 

China primary lead operating rate
operating rate survey
China refined lead output

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