Supplies to dip in Aug as secondary lead smelters suspend on thin margins

SHANGHAI, Aug 7 (SMM) – Supplies of secondary lead in August are likely to shrink from July as thin margins eroded production enthusiasm across smelters. The high-temperature weather also deterred producers from operating and some suspended production for a month at the end of July. 

Profit margins began to narrow in July as production at secondary lead smelters recovered from the end of month-long environmental reviews. Price of raw materials battery scrap that fell slower than lead prices also accounted for the thinner profits. 

As of August 7, margins stood at up to100 yuan/mt, down from 300-400 yuan/mt in mid-July, and down from highs of 800-1,000 yuan/mt at the end of June. Prices of secondary refined lead weakened some 3,100 yuan/mt from early July, and prices of battery scrap fell around 550 yuan/mt.

In Hunan and Yunnan provinces, almost all secondary smelters suspended from the end of July. Production in Guizhou province halved from some 800 mt per day at the end of June. In Hebei province, smelters cut 40-50% of production, leading to a daily output decline of some 400 mt from a month ago. 

As of August 7, prices of secondary refined lead stood at 17,850-17,950 yuan/mt, down 200 yuan/mt from last Friday, while prices of electric vehicle waste batteries fell 50 yuan/mt from August 3 to 9,900-10,000 yuan/mt.