[Pb] Further Analysis of Environmental Protection at Domestic Lead Smelters

SHANGHAI, Aug. 25 (SMM) -- Particular attention has been paid to the environmental protection at domestic lead smelters after lead poisoning was reported to have affected hundreds of children in Fengxiang county, Shaanxi province. According to market insiders, Jiyuan city in Henan province was the first city to announce and implement the suspension of inefficient lead capacity on August 23rd, with estimated capacity of 400kt/yr involved in the case, and small-scale inefficient capacity as a proportion of 50%. Jiyuan city's move aims to eliminate the inefficient lead smelting capacity and improve the comprehensive level of environmental protection, and total lead output during August in Henan province is expected to drop by 10%, since lead smelters at other cities in Henan province have not received any notices yet. Lead output in Henan province will report relatively marked declines during September.

    Ex-works prices for lead ingot in Henan province were generally above RMB 13,700/mt, up 2% compared to last Friday, while LME lead prices hit a new high of USD 1,993/mt in electronic trading at 16:00, up more than 6% compared to previous trading day. On the one hand, domestic/LME lead price ratio dropped further, further increasing raw material costs at domestic producers; on the other hand, overcapacity of domestic lead smelting and lead-acid battery exerted great downward pressure on lead prices during recent months, so any upward room for lead prices will remain to be seen in the future even when market players predicted market supply would decrease.

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