Lower demand to further buoy lead concentrate TCs in Sept

SHANGHAI, Aug 28 (SMM) – Treatment charges (TCs) for domestic lead concentrate are likely to extend their increases in September as demand from smelters will slow down after they restocked this month. 

Smelters stockpiled raw materials as lead prices tumbled from the start of August to lows around 17,450 yuan/mt in mid-August. With sufficient inventories of raw materials, smelters are expected to have greater bargaining power over miners next month, SMM believes. 

SMM estimates that the monthly average TCs for domestic lead concentrate will rise 50 yuan/mt in metal content (mmt) from August, to 1,700-1,900 yuan/mmt in September. 

Domestic lead concentrate TCs, on a weekly basis, have risen across several provinces from the start of this month, SMM assessed. As of Friday August 24, TCs stood at 1,600-1,800 yuan/mmt in Hunan, up 50 yuan/mmt from August 10, and at 1,600-1,700 yuan/mmt in Guangxi, up 100 yuan/mmt from August 3. 

Miners in Inner Mongolia, Qinghai, Yunnan gradually resumed operation from the beginning of August as temperatures climbed. This grew supplies of lead concentrate and buoyed TCs. 

Separately, SMM expects that TCs for imported lead concentrate are likely to remain unchanged at $15-25/dry mt next month.