Lead concentrate shortage to cap TCs in Hunan, Guangxi, Yunnan in Sept

SHANGHAI, Sep 5 (SMM) – Treatment charges (TCs) for lead concentrate are unlikely to grow in Hunan, Guangxi and Yunnan provinces in September given short supplies across those regions, SMM expects.

SMM assessments as of Friday August 31 showed that TCs for domestic lead concentrate (Pb 50%) last week remained unchanged at 1,600-1,800 yuan/mt in Hunan and Yunnan and at 1,600-1,700 yuan/mt in Guangxi. That week, TCs in Henan increased by 100 yuan/mt to 1,800-2,000 yuan/mt and TCs in Inner Mongolia gained 25 yuan/mt to 1,750-1,950 yuan/mt. Prices are all in lead content.

Supplies of lead concentrate in Hunan are insufficient for demand in the region after mining capacities shrank in the last two years in Chenzhou city, a major production area of nonferrous metals in the province. As the central government intensified efforts in environmental protection, small and medium-sized miners with outdated mining technology or that failed environmental checks were shut down in Chenzhou. This sharply reduced the output of lead concentrate across the area.

Poorer lead grades of run-of-mine (ROM) ore also tightened the supply of concentrates.

These shortages also expanded to Yunnan and Guangxi, which are geographically close to Hunan. Smelters in Hunan purchase concentrate from Yunnan and Guangxi, and this tightened supplies across the two provinces.

Smelters are also likely to step up purchases of raw materials between late-September to early-October, for the 2018/2019 winter season.