Weak market keeps China's primary lead production below expectations in Jul

SHANGHAI, Aug 8 (SMM) – Primary lead production across China increased on the month in July but failed to meet SMM’s expectations, as key producers Henan Yuguang, Minshan started maintenance and as lower lead prices below the 16,000 yuan/mt level depressed production at smelters that recovered from overhaul. 

SMM data showed that domestic output of primary lead stood at 221,000 mt in July, up 0.24% from June but down 14.78% from July 2018.

This brought production in the first seven months of this year to 1.71 million mt, with a year-over-year increase of 0.93%, slowing from a rise of 3.77% in January-June.

In July, smelters including Hunan Jingui, Chifengshan Gold, Silver & Lead, West Mining, and Shandong Humon resumed from maintenance. 

Production in July slipped from a year ago as rising treatment charges (TCs) for lead concentrate helped to accelerate resumption at smelters in July 2018, even as lead prices also came off from highs at that time. The monthly TCs for domestic lead concentrate, with 50% Pb, climbed from 1,250 yuan/mt at the start of 2018 to 1,650 yuan/mt in July 2018. 

SMM expects production of primary lead to expand significantly to 256,000 mt in August as major smelters, Henan Yuguang and Minshan, will return from maintenance. A rally in lead prices and expectations of a traditional high season in August may drive primary smelters that conclude July’s maintenance into full operation this month. SMM learned that there is virtually no new maintenance planned for August.