SHANGHAI, Sept. 6 (SMM) - China’s lead concentrate production totaled 224,000 mt in July, down 10.31 percentage points or 26,000 mt MoM and 0.74 percentage points YoY, according to NBS. The output also fell 5.93 percentage points YoY to 1.39 million mt during the first seven months of 2015.
Slipping profits, narrowed by weak lead and silver prices, curbed mines’ producing interest. This explained the large drop in July’s concentrate production. SMM #1 lead average price was RMB 13,209.8/mt in July, falling RMB 258.1/mt from June. Meanwhile, SMM #2 silver prices averaged RMB 3,251.1/kg, down RMB 216/kg MoM, according to SMM data.
By region, Inner Mongolia saw a decline of 9,000 mt MoM to 104,000 mt due to power restrictions. Concentrate output dropped 5,000 mt to 7,000 mt, 3,000 mt to 30,000 mt and 3,000 mt to 9,000 mt in Guangxi, Hunan and Sichuan, respectively, all on the MoM basis.
July’s concentrate output totaled 9,000 mt in Shaanxi and 6,000 mt in Gansu, both down 1,000 mt from June. Tibet saw the production down slightly to 8,000 mt. In south China, concentrate output was low in July as mining and transport were badly impacted by rainy days.
Of the top ten provinces in concentrate output, only three, namely Jiangxi, Yunnan and Henan, posted a growth in July. Concentrate output edged up to 14,000 mt and 9,000 mt in Yunnan and Henan, respectively. Jiangxi reported a rise of 4,000 mt MoM to 8,000 mt as local mines kept stable production. Averagely, 3,000 mt was produced per month during the first half of this year in Jiangxi.
Chinese lead concentrate production is predicted to fall further in August as anemic lead and silver prices continue to depress production at mid-sized and small ore suppliers. This situation is worsened by south China’s rainy days.