Poor demand raises lead concentrate TCs for Mar

SHANGHAI, Feb 26 (SMM) – Lower demand and high inventories of raw materials across primary lead smelters lifted March’s treatment charges (TCs) for both domestic and seaborne lead concentrate, an SMM survey found. 

CNY maintenance at primary smelters in Hunan province and rectifications, overhaul in Yunnan province dragged local smelters’ demand for lead concentrate, and drove them to charge higher processing fees as of Monday February 25. SMM estimates that maintenance affected production at smelters by 30,000-40,000 mt in February. 

Last week, the SHFE/LME lead price ratio continued to shrink and kept the import window closed. This eroded profits at some smelters and also prompted them to raise TCs. 

Monthly treatment charges (TCs) for domestic lead concentrate (Pb 50%) rose 50 yuan/mt from February, to 1,750-1,950 yuan/mt for March. Charges were in Pb content.  

TCs for imported materials (Pb 60%) stood at $20-30/dmt for March, up $2.5/dmt on the month. 

The increase came after TCs went flat over nearly the past five months, SMM assessment showed.  

However, the growth of TCs in Henna and Inner Mongolia will face downward pressure in the near term as safety checks across Inner Mongolia’s mines will affect lead concentrate supply. The inspections followed after a mine accident at Yinman Mining in Inner Mongolia on February 23.