Operating rates at secondary lead smelters up 5 percentage point in Sep

SHANGHAI, Oct 17 (SMM) – Secondary lead smelters operated at higher levels in September as output recovered from maintenance, environmental restrictions, equipment breakdown or upgrading.

Operating rates across smelters averaged 55.67% in September, up 5.35 percentage points from August, SMM data showed from interviews with 28 smelters who have obtained a production licence with total annual capacity of 3.41 million mt.

Those smelters produced 158,100 mt of secondary lead last month, up 15,200 mt from a month earlier.

The rates across large plants with annual capacity greater than 100,000 mt increased by 4.7 percentage points to stand at 62.03% in September as Anhui Huaxing returned to normal operation after maintenance and as Jiangsu Huaxing shrugged off the impact of environmental restrictions and equipment breakdown and stepped up operation.

Operating rates at plants with annual capacity of 50,000-100,000 mt increased 7.54 percentage points to 42.51% last month as production resumed in Guizhou after environmental probes ended, and as Yunnan Zhenxing recovered from equipment upgrading. Output at smelters in Guizhou such as Jinlong and Huoqilin jumped in September.

However, operating rates across smaller plants with annual capacity below 50,000 mt dipped 2.1 percentage points and stood at 51.58% in September due to maintenance at Tianjin Dongbang.

In September, profits of secondary lead fuelled producing enthusiasm across smelters when lead prices stayed high. Hebei Huacheng and Hubei Chukai ramped up production and this also bolstered overall output last month.

Across secondary lead smelters without a production licence, SMM research found that operating rates surged in September as tight supplies of battery scrap eased and as profits of secondary lead widened. This grew overall output.

Average operating rates across secondary lead smelters are likely to dip in October, which would shrinkoverall output, as Anhui Huaxing and Jiangsu Huaxiang suspend for maintenance. Declining profits would also erode producing enthusiasm across smelters, especially those without production licences.