SHANGHAI, May 10 (SMM) – TCs for Chinese lead concentrate may decline for the foreseeable future with tightened supply, SMM predicts.
Concentrate imports are expected to remain low in Q2. Century and Lisheen mines were closed in 2015 and Glencore and Missouri mine announced production cut by 200,000 tonnes (Pb content) of concentrate in 2016. Moreover, Korea Zinc is expanding its lead smelters and this will lead to reduction in inbound shipments to China.
Concentrate production in China will unlikely maintain the 3.6% year-on-year growth in Q2. The production was up 3.6% year-on-year in Q1 but this was mainly due to low base in Q1 2015. Strict environmental protection inspections and weak zinc prices will put a drag on concentrate output in China.
Concentrate inventories in China should continue losses. As of the end of April, concentrate inventories at domestic major primary lead producers were less than 30 days and inventories at Port of Lianyungang were below 70,000 tonnes.
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