SHANGHAI, Jun. 11 (SMM) – The average operating rate at major Chinese primary lead smelters fell by 1.77 percentage points to 58.58% in May, due mainly to ongoing raw material shortages, SMM’s latest survey showed.

The 49 smelters surveyed by SMM, claiming 4.705 million tpy in capacity, produced 234,100 tonnes of refined lead in May.

Tight raw material supply remained the major constraint on lead production in May. Market players had expected an easing in lead concentrate shortages after mines in north China restarted operations with the weather improving. However, a fewer-than-expected number of mines resumed operations due to relatively low lead and silver prices.

Environmental protection inspections in Hunan and consolidation across Yunnan’s lead mining sector also affected lead concentrate production in the two regions.

Data from the National Bureau of Statistics showed that China’s lead concentrate output in the first four months of 2014 totaled 743,400 tonnes, down 14.3% from the same period last year.

China imported only 96,700 tonnes of lead concentrate during April, down 38.21% from March’s 156,600 tonnes due to the low Shanghai/LME lead price ratio and continued RMB depreciation.

Large smelters Jinli Lead Industry Co., Anyang Yubei Gold & Lead Co., and Chenzhou City Jingui Silver Co., entered maintenance cycles during May, SMM learned.

A number of medium smelters, including Henan Zhicheng Gold & Lead Co., Anhui Tongguan Nonferrous Metals (Chizhou) Co., Hunan Guiyang Yinxing Nonferrous Smelt Co., Anhui Huaxin Lead Industry Group, Guangxi Chengyuan Mining & Smelting Co., Luoyang Yongning Gold & Lead Refining Co., and Nandan Nanfang Nonferrous Metals Smelting Co., also started facility maintenance during the month.

Yunnan Chihong Zinc & Germanium Co., Jiangxi Copper Lead & Zinc Co., Jiangxi Jinde Lead Industry Co., and Hunan Zhantai Non-ferrous Metals Co. resumed or ramped up production in May, but the additional output failed to offset lost output.

The result is that the average rate at large smelters with capacities above 100,000 tpy fell in May to 71.19%, down 7.68 percentage points from April’s average of 78.87%. The rate at medium smelters with capacities between 50,000-100,000 tpy was off by 1.53 percentage points to 49.82%.

Average rate at small smelters with capacities below 50,000 tpy, however, surged by 34.73 percentage points in May to 67.02%.

Although small smelter Huludao Nonferrous Metals Co. conducted maintenance last month, Gejiu Chuangyuan Economic and Trading Co., Mengzi Mining & Metallurgy Co., and Xinjiang Shache Hengchang Smelting Co. all restarted operations, helping increase the average operating rate for smaller smelters.

Jianxi Copper Lead & Zinc Co., Guangxi Chengyuan Mining & Smelting Co., Nandan Nanfang Nonferrous Metals Smelting Co., Huludao Nonferrous Metals Co., and Anhui Huaxin Lead Industry Group are scheduled to resume operation in June. However, Jinli Lead Industry Co., Chenzhou City Jingui Silver Co., Henan Zhicheng Gold & Lead Co., Anhui Tongguan Nonferrous Metals (Chizhou) Co., and Liaoning Haicheng Chengxin Nonferrous Metal Co. all reamin in maintenance cycles. Thus, SMM expects the average operating rate at China’s primary lead smelters to fall further in June.