SHANGHAI, Nov 27 (SMM) – Treatment charges (TCs) for domestic lead concentrate are likely to fall in the first quarter of next year when supply is unexpected to meet demand.
Domestic lead concentrate TCs stood at 1,800 yuan/mt in Pb content in the fourth quarter of 2018, SMM assessments showed. This reflected limited growth momentum in TCs.
From October, northern miners at high altitudes began to cut or even suspend production due to inclement weather while primary lead smelters began to stockpile raw materials for the upcoming winter. This tightened supplies of lead concentrate across Chinese markets.
In the first quarter of 2019, some miners will cut production around the Chinese New Year holiday while northern miners at high altitudes remain suspended. Such a low output would widen the supply deficit across the market despite inflows of seaborne materials, depressing concentrate TCs as a result.
Concentrate TCs are expected to rise in the second quarter of 2019 when miners recover from holidays and inclement weather.