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China Q1 Sees Steady Growth of Lead, Nickel Output But Tight Zinc Concentrate Supply

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BEIJING, Apr. 21 -- China's lead and nickel output posted steady year-on-year growth in the first quarter on strong demand from auto and steel industries while its zinc output slid in the period.
&nbsp;&nbsp;&nbsp; Official statistics showed that the country's nickel and lead output rose 37.1 percent and 23.9 percent year on year in the first quarter while its zinc output slip 3.1 percent to 851,000 tons in the same period despite an 8.2 percent growth in March.
&nbsp;&nbsp;&nbsp; Zinc's major demand comes from cell production (80 percent of world lead demand from battery), especially storage battery used in transportation vehicles.
&nbsp;&nbsp;&nbsp; Recently, the auto sales in China, India, Brazil, Germany and France have rebounded strongly. U.S., British, and South Korea also plan to roll out stimulus policy for purchasing autos.
&nbsp;&nbsp;&nbsp; Once these policies are carried out, world auto sales are promising to go up further, which means lead demand will firstly climb among base metals.
&nbsp;&nbsp;&nbsp; China's zinc output in March grew 30.1 percent from February, but only up 8.2 percent over the same period last year. Its output in the first quarter even slipped 3.1 percent year on year.
&nbsp;&nbsp;&nbsp; March saw lead concentrate output reach 107,600 tons, up 19.2 percent year on year. Its output in the first quarter totaled 224,500 tons, up 7.1 percent over a year earlier.
&nbsp;&nbsp;&nbsp; However, zinc concentrate output stood at 217,800 tons in March, down 5.4 percent year on year. Its output in the first quarter dropped 15.6 percent on faltering market demand, indicating that the domestic zinc concentrate supply becomes tight.
&nbsp;&nbsp;&nbsp; Insiders with China's zinc refining giant Zhuzhou Smelter Group Co. disclosed that the domestic zinc concentrate supply failed to recover despite rising price of zinc this year, and the tight supply pressure hadn't been relieved since December last year.
&nbsp;&nbsp;&nbsp; Since January 2009, the country's monthly nickel output has maintained at 16,000-18,000 tons, far higher than that for the fourth quarter last year.
&nbsp;&nbsp;&nbsp; Analysts hold that the domestic steel industry had not much idle capacity in the first quarter, providing a sound market environment for its upstream nickel. What's more, the domestic stainless steel enterprises' output has climbed by four months running, reflecting their growing demand for nickel.
&nbsp;&nbsp;&nbsp; Some insiders note that apart from increase in output, the net nickel import also expanded significantly in the same period, showing the nickel demand is increasing or its stocks returning to normal level. They predict that nickel price will top the peak in January and even go beyond market expectation.
&nbsp;&nbsp;&nbsp; (Source: chinamining.org)

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