SHANGHAI, Oct 18 (SMM) – Operating rates across licensed smelters of secondary lead in Jiangsu, Anhui and Henan provinces averaged 49.3% in the week ending October 18, up 2.8 percentage points from the previous week, according to an SMM survey.
The operating rates in Jiangsu and Anhui remained unchanged at 58.3% and 40%, respectively, while the rate in Henan rose 11.1 percentage points to 51.8%, as Jinli smelter fully recovered its two battery breaking lines at the start of the week.
As of October 18, secondary refined lead was traded at a discount of 400-600 yuan/mt against the average of SMM 1# lead, ex-factory.
The discount doubled from a week ago, as high profit margins and pessimistic market prospects prompted secondary lead refiners to lower their offers while downstream consumers (lead-acid battery producers) remained cautious about procurement.
Secondary lead refiners now see a decent profit, as barely changed battery scrap prices and greater supplies prevented prices of secondary lead bullion from tracking gains in SHFE lead higher.
SHFE lead hit a more than one-week high of 17,200 yuan/mt overnight, bolstered by its firmer LME counterpart and low social inventories.