SHANGHAI, Dec. 17 (SMM) – Although Chinese primary lead smelters resumed operation following the APEC and SOEs ramped up production to meet annual targets, their average operating rate only increased 0.41 percentage point in November, due to tight cash flows, SMM’s latest survey indicates.

Operating rate at the 49 Chinese primary lead smelters, with a total capacity of 4.76 million tpy, surveyed by SMM was 65.73% in November.

Some mid-sized smelters restarted production after the APEC, and some others, especially state-owned companies, stepped up production to meet production goals since they operated at low capacity earlier.

That being said, limited money supply imposed a ceiling on the rise in operating rates.

The average SMM #1 lead price fell 160 yuan per tonne in November, while silver prices tumbled over 400 yuan per kilogram, widening losses of lead smelter. Such situation was exacerbated as banks cut credits. In this context, some large smelters slowed or ceased production.

Mengzi Mining & Metallurgy, Gejiu Shadian Refinery and Gejiu Shadian Xingsha Nonferrous Metals Smelting have recently conducted maintenance or halted production. SMM thus expects the average operating rate at China’s primary lead smelters to remain low in December.  

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