Operating Rate at Chinese Lead Smelters Up in Aug. on Production Resumption, Rising Raw Material Supply

SHANGHAI, Sept. 9 (SMM) – Production resumption and rising raw material supply pushed average operating rate at Chinese primary lead smelters up to 67.74% in August, from July’s 59.23%, a recent SMM survey reveals.

SMM Survey of Operating Rate at Primary Lead Smelters Aug. 2014

Source: SMM

Anyang Yubei Gold & Lead, a large smelter, completed maintenance in August. Some medium-size smelters, including Zhuzhou Smelter Group, Anhui Tongguan Nonferrous Metals, and Liaoning Haicheng Chengxin Nonferrous Metal, all restarted operations. In response, refined lead output grew markedly in August, matching SMM prediction in July.

Increased supply of lead concentrate and crude lead also pushed up output at some lead smelters in August. The average SMM lead price was up 400 yuan per tonne in August from July’s 14,076 yuan per tonne, causing lead concentrate and crude lead supply to grow slightly. As a result, SMM raised September TCs for Chinese lead concentrate by 50 yuan per tonne to 1,500-1,700 yuan and TCs for crude lead by 50-100 yuan per tonne. TCs for crude lead climbed from 550 yuan per tonne to 600 yuan in Henan, and were up from 600 yuan to 700 yuan a tonne in Hunan.

In August, output at lead smelters increased at an appreciable rate, but some motive battery producers curtailed output on anemic downstream consumption, which reduced demand for lead. Lead prices thus recorded a sharper fall than copper, zinc, and aluminum prices during the month.

The SMM survey also finds that primary lead smelters with large orders and deliverable brands held low finished goods inventories in August. Inventories at other smelters, however, rose since their sales were poor.

SMM surveyed 49 primary lead smelters with a capacity totaling 4.71 million tpy and combined output hitting 270,700 tonnes in August.

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