Weak Demand and Lead Prices to Curb Operating Rate Growth at Chinese Primary Lead Smelters in July

SHANGHAI, Jul. 7 (SMM) – Poor end-user consumption and lead prices will limit the rise in operating rate at Chinese primary lead smelters in July, SMM foresees.

SMM survey shows that Zhuzhou Smelter Group, Chifeng Shanjin Silver & Lead and Jingui Silver plan to conduct maintenance in July. Also, some smelters may cut production in July due to dropping lead prices. Those factors will combine to depress operating rate at smelters.

TCs for Chinese lead concentrate are generally between 1,900-2,000 yuan per tonne, their highest since 2012. But low silver prices, falling prices of by-products and high capital costs throw smelters into losses. Consequently, smelters keep utilization rate low.

Downstream lead-acid battery makers still show little buying interest in this off-season with large inventories on hand. High temperature will also curb battery production, further cutting downstream demand, which will not lend support to operating rate at smelters.

Operating rate at Chinese primary lead smelters was down 0.75 percentage point MoM to 58.3% in June, SMM learns.