SHANGHAI, Dec 6 (SMM) – Primary lead output in China increased more than expected in November as smelters including Henan Yuguang, Henan Jinli, Xing’an Silver & Lead, and Haicheng Chengxin recovered from maintenance, and phase-two production lines at Hunan Shuikoushan Zhihui smelter commissioned.
Jiangxi Jinde and Henan Xinling, meanwhile, remained in regular maintenance last month. This, coupled with reduced output at West Mining and Yunnan Chihong due to equipment issues, capped the overall increase in lead production in November.
SMM data showed that domestic output of primary lead stood at 271,000 mt in November, 3.95% higher than October and 2.4% higher than November 2018. Production in January-November this year was up 0.87% from the same period a year ago.
Continued rises in treatment charges (TCs) of lead concentrate encouraged production enthusiasm at primary lead smelters, and this was also behind the greater-than-expected increase in primary lead output.
SMM assessments indicated that the monthly TCs for imported 60% Pb lead concentrate have climbed for the fourth consecutive month, to $115/dmt in December, up $90/dmt from August.
December TCs for domestic 50% Pb lead concentrate have increased for the third straight month to stand at 2,150 yuan/mt, 300 yuan/mt higher than September (both on a metal content basis).
SMM expects domestic production of primary lead to extend its increase by around 10,000 mt in December, as Henan Xinling, Jiangxi Jinde and West Mining resume after overhaul.
Sufficient supply of lead concentrate will continue to boost TCs and support production at primary lead smelters amid falling lead prices. SMM assessed trades of TCs for domestic 50% Pb lead concentrate occurred at 2,200-2,400 yuan/mt in metal content as of December 6.
Stockpiles of crude lead will ensure production at refined lead smelters albeit frequent smog alert in the northern Chinese regions such as Henan province amid the heating season.
