China Lead Concentrate TCs to Grow Further in September

SHANGHAI, Aug. 25 (SMM) – TCs for Chinese lead concentrate (Pb 50%) are expected to be up 100 yuan per tonne (Pb content) MoM to 2,100-2,200 yuan per tonne (Pb content) in September, SMM reckons.

Currently, domestic concentrate TCs mainly quote 2,000-2,300 yuan per tonne (Pb content).

Low operating rates at lead smelters are behind the growth in TCs. The rates at domestic major smelters average 57.83% during January-July while the average rate of 2014 totals 60.99%, SMM survey shows.

Inflow of concentrate imports help to drive TCs up. Profits from imported materials average 1,300 yuan per tonne (Pb content) in August and this lures lead smelters to import concentrate, increasing supply in domestic market.

Mounting stocks and tight liquidity are also cited as reason for the growth in concentrate TCs. Lead smelters, with stocks built previously, show little buying interest. Besides, tightness in liquidity also curbs those smelters’ purchase.

Domestic concentrate TCs have jumped 450 yuan per tonne (Pb content) heading into this year. Mines’ profits have been narrowed marginally due to slipping sliver price multiple and zinc prices. As such, the rise in domestic concentrate TCs should be limited.

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