Maintenance, environmental cuts lower primary lead output more than expected in Jun

SHANGHAI, Jul 5 (SMM) – Primary lead production across China shrank more than expected in June, as concentrated maintenance across primary lead smelters and environmental curbs affected production, an SMM survey showed on Friday July 5.  

Output of primary lead came in at 220,000 mt in June, down 12.69% from May and down 7.07% from June 2018. 

This brought production in the first half of the year to 1.49 million mt, with a year-over-year increase of 3.77%, down from an increase of 5.4% in January-May. 

Primary smelters that underwent maintenance in June were mostly large and medium-sized ones, and this considerably lowered production. At the end of June, intensified air pollution triggered environmental cutbacks in Jiyuan city of Henan province. This, together with equipment issues, drove smelters of Henan Yuguang and Minshan into maintenance and dragged on overall output in June. 

However, the environmental impact on primary smelters waned from the same period a year ago, as China avoided a uniform approach to deal with pollution and as environmental awareness improved across major industrial enterprises. In June 2018, Beijing-led inspection teams reviewed the rectification works across smelters in Henan, Hunan, and Yunnan provinces. Jiyuan of Henan also imposed cuts of 30-50% on mills, which significantly hampered local operation. 

SMM expects production of primary lead to only nudge up to 226,000 mt in July, as the impact of maintenance caps production recovery. Overhaul at Henan Yuguang and Minshan will last through July. Hunan Jingui, Chifengshan Gold, Silver & Lead, West Mining, and Shandong Hengbang will end maintenance in July, but a sluggish market will keep some other primary smelters from resuming fully.