China Primary Lead Smelters Cut Operating Rate to 64% in Sept. on Severe Loss, Raw Material Shortage

SHANGHAI, Oct. 27 (SMM) – The average operating rate at China’s primary lead smelters fell to 64% in September, down 3.74 percentage points from August due to large losses and tight raw material supply, SMM’s most recent survey indicates.

SMM surveyed 49 smelters with a total capacity of 4.705 million tpy, which produced a total of 247,500 tonnes of refined lead in September, down 23,200 tonnes from 270,700 tonnes in August.

Lead smelters suffered sizeable losses in September after the average SMM #1 lead price fell to 13,894 yuan per tonne, down 581 yuan a tonne from August.

In addition, falling lead and silver prices turned mines reluctant to sell, while imported lead concentrate prices were too high. As a result, production at lead smelters was disrupted by shortages of raw materials.

Some smelters restarted maintenance in September, also pushing down their operating rates.

In October, output losses resulting from new maintenance were more than offset by output increases from production resumption. Despite this, SMM projects that the average operating rate at primary lead smelters will hold steady at 64%-65% in October since lead smelters will have low willingness to arrange production against low prices and tight lead concentrate supply.