New maintenance lowers operating rates of primary lead smelters 

SHANGHAI, May 31 (SMM) – Primary lead smelters in Henan, Hunan and Yunnan provinces operated at an average lower rate in the week ended Friday May 31 as new maintenance at a smelter in Hunan cut the rate. 

Operating rates across primary lead smelters in the three provinces averaged 59.4% in the week through May 31, down 0.1 percentage point from a week ago, SMM data showed. 

Primary smelters in Henan operated at an average rate of 76.6% and smelters in Yunnan at 36.9%, both flat on the week. 

Hunan Shuikoushan smelter put its refining capacity into maintenance on May 27, and this lowered the average rate in Hunan by 0.4 percentage point on the week, to 44.8%. The maintenance is expected to affect output by 4,000-4,500 mt/month. 

SMM also learned that Hunan Jingui planned to extend its overhaul on refining capacity to July, and Yuguang smelter in Henan remained in maintenance last week. Shaanxi Hanzhong Zinc commenced maintenance on May 26. 

Maintenance has had limited impact on primary lead output so far this year. However, primary materials saw greater interest from downstream consumers recently as secondary lead lost its price advantage. This amplified the impact of maintenance at primary smelters, which lowered the supply of lead ingot used for deliveries and created arbitrage opportunities. 

As of 13:50 on Friday May 31, the price spread between the SHFE July and August contracts widened to 100 yuan/mt.