[Pb Output]China Lead Concentrate Output Falls 0.9% YoY in June

SHANGHAI, Jul. 28 (SMM) - China lead concentrate production totaled 1.14 million mt during January-June 2015, down 8.72% YoY. Domestic concentrate output came in at 250,000 mt in June 2015, down 0.9% YoY, according to China's National Bureau of Statistics. 

SMM attributed H1’s year-on-year large fall in concentrate production to the following reasons:

First, ore suppliers kept low operation rate against sluggish lead and silver prices. SMM #1 lead prices averaged RMB 12,972.9/mt in the first six months of 2015, decreasing RMB 900.8/mt YoY. In the same period, SMM #2 silver prices averaged RMB 3,527.1/kg, down RMB 591.7/kg from January-June 2014.

Second, environmental protection cracks also limited concentrate production at ore suppliers. Lots of mines were closed owing to strict environmental protection inspection in Fujian, Sichuan, Guangxi this year. During January-June, concentrate output fell 79.44% YoY, 62.4% YoY and 33.28% YoY in Fujian, Sichuan and Guangxi, respectively.

Concentrate production dropped 16,000 mt from May in June, resulting from the production drop of 30,000 mt to 113,000 mt in Inner Mongolia. Local large mines kept stable production in June, SMM learnt.

In other regions, concentrate output declined 6,000 mt MoM to 2,000 mt in Sichuan and fell to 14,000 mt in Yunnan in June. The production was up 2,000 mt MoM to 32,000 mt in Hunan thanks to high operation rate at local large mines. The output grew 2,000 mt MoM to 12,000 mt and to 7,000 mt in Guangxi and Gansu, respectively, as some mines recovered from environmental protection cracks.

In June, Shaanxi saw a rise of 2,000 mt MoM to 11,000 mt in concentrate production. The production increased 4,000 mt MoM to 9,000 mt in Tibet, grew to 9,000 mt in Henan and rose to 6,000 mt in Guangdong.

Weak prices of lead and silver dampen production at mines, but more mines plan to resume operation following environmental protection inspections. Thus, lead concentrate output should be set for modest rise in July.