SHANGHAI, Dec 6 (SMM) – Operating rates across licensed smelters of secondary lead in Jiangsu, Anhui and Henan provinces averaged 57.1% in the week ending December 6, up 2.1 percentage points from the previous week.
Higher operating rates in Henan accounted for the overall increase as Henan Jinli increased the daily treatment capacity for battery scrap, lifting the average rate in Henan by 8.3 percentage points on the week to 66.7%.
The operating rates in Jiangsu and Anhui remained unchanged from a week ago at 74.7% and 36% respectively.
Lead futures extended its decline this week, but prices of feedstock battery scrap only slipped slightly, underpinned by tight availability in the market as the warmer weather this winter dampened the need for battery swapping.
While large scale smelters demanded lower prices of raw materials to secure profits, cheap products of battery scrap were in short supply and drove secondary refined lead smelters to cut discounts.
The upside room of secondary refined lead premiums, meanwhile, was also capped as consumption remained sluggish on the slower-than-expected arrival of the traditional high-demand season this winter.
SMM assessed that, as of December 6, prices of secondary refined lead stood at a discount of 50 yuan/mt to a premium of 50 yuan/mt against the average prices of SMM 1# lead, ex-work with tax included. This was roughly flat from a week ago.