Chinese Spot Lead TCs Rise to $120

SHANGHAI, Oct. 13 -- China's spot treatment charges (TCs) for imported lead concentrates have surged to USD 120/mt as local mines ramp up while smelters stay closed.

    "It was about USD 90/mt before the holiday but has surged to USD 120/mt," said an analyst.

    Import TCs have surged over 33% from late September as domestic mines have resumed operating at rates of 80-85% in response to higher prices, from 40-50% a few months ago, market sources report.

    "With more local concentrate available, the market is less independent on imported ones," said a physical trader in Shanghai.

    Meanwhile, Chinese lead smelters ordered to close in the wake of lead poisoning concerns are expected to remain shut in the next several weeks, sources report.

    "I hear that villagers in Jiyuan, a city in Henan province, are still strongly protesting against local lead smelters and some have announced again they have been attacked by lead poisoning," said another analyst in Shanghai.

    "The villagers are asking for more, even the permanent closure of smelters, to make sure their children won't be negative affected," he said.

    Henan is China's biggest lead producer and some traders had expected the province to resume production after the national day holiday.

    "But things seem to be much more serious than we thought they were," he said. "I hear that the mayor of Jiyuan city did not take even one day off during the Chinese holiday."

    Around mid-September, when Chinese authorities shut down as much as 700,000 tpy of lead smelting capacity, Chinese market participants had said that the closures were expected to have little effect given the market's overcapacity.

    Now, with China's September lead output expected to have dropped sharply, spot market supply has tightened considerably, said market participants.

    Lead production data is expected to be released by the National Bureau of Statistics next week.

    "My company has stockpiled some lead and we are not in a hurry to sell them," said the trader. "We think the market will turn tight soon."

    (Source: Metal Bulletin)