[Pb Ore]China Lead Smelters Reluctant to Import Concentrate despite High SMM/LME Lead Price Ratio

SHANGHAI, Aug. 7 (SMM) – China lead smelters still show little interest in importing lead concentrate even SMM/LME lead price ratio as high as 7.5 recently, SMM learns.

Primary lead smelters left operating rate below 60% in July, cutting demand for lead ore.

Sluggish lead and silver prices curbed operating rate at primary lead smelters in the first half of this year. Operating rate at domestic major lead smelters averaged 57.38% in H1, 2015, compared with 58.73% in the same period 2014. Average operating rate came in at 60.99% in 2014.

China concentrate output fell 8.72% YoY in January-June, but only 768,000 tonnes of concentrate were imported, down 2.01% versus January-June 2014, due to weak demand at lead smelters.

“Some lead smelters cut purchase for mounting stocks and tight liquidity. Large smelters even sell concentrate directly. Some smelters report tight control on L/C issuance”,  SMM lead group adds.

A considerable number of concentrate imports have arrived at Chinese ports currently. Inventories at Lianyungang port continue to rise since middle and late July. As of August 7, the port’s inventories totaled 163,800 tonnes, upping 14% from middle July and its highest level this year, further weakening lead smelters’ demand for concentrate imports. 

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