China May Pb Output Data Analysis

SHANGHAI, June 28 (SMM) --

Concentrate
According to the China Non-ferrous Metals Industry Association (CNIA), China's output of lead concentrate was 161 kt in May, up 16.95% on a monthly basis.  YTD output was 617 kt, up 56% YoY.  China's output of lead concentrate has increased over the past several months, despite expectations of declining output in February due to the Chinese New Year holiday.  SMM believes low operating rates at mines in 2009 are resulting in the sharp increase in YoY output growth of lead concentrate during 2010.  Meanwhile, costs pressures are stimulating domestic lead producer interest in purchasing domestic lead concentrate, also contributing to increases in output of domestic lead concentrate.   

Refined Lead 
According to CNIA, China's output of refined lead was 310 kt in May, up 3.44% MoM.  YTD output was 1.443 million mt, up 9.4% YoY.  Output of primary lead was 209 kt in May.  SMM believes China's refined lead output will fall in June due to tight supply of lead concentrate and unfavorable production conditions resulting from low prices in 2Q.  It is worth noting that the proportion of primary lead to total output increased slightly to 65%, and is closely related to higher scrap battery prices since the start of 2010 and more strict environment protection inspections at secondary lead producers.

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