SHANGHAI, Oct 19 (SMM) - The average operating rate of domestic primary lead smelters stood at 64.88% in September, up 5.67 percentage points month-on-month and 2.81 percentage points year-on-year, according to SMM survey.
The figure exceeded SMM’s previous forecast. Smelters in Hunan, Henan and other regions resumed their production in September after the power rationing was lifted. Some smelters also resumed their production from maintenance. In order to accomplish their full-year production and sales targets, some large smelters began to ramp up their production at the end of the third quarter. Since mid-to-late August, the SHFE/LME lead price ratio has risen, leading to a significant increase in lead concentrate imports, which provided sufficient raw materials to smelters. The completion of technical upgrading by Wanyang Group also contributed to higher output.
Entering October, large smelters will remain committed to achieving their annual targets, while some mines, such as Yunnan Mengzi and Western Mining, are under maintenance. The pandemic-induced transportation restrictions in Hunan and Inner Mongolia hindered the raw material shipments to some local smelters. Some smelters in Honghe Prefecture, Yunnan province will be subject to power rationing in the dry season from this winter to next spring. As such, SMM predicts that the average operating rate will slide 1.44 percentage points MoM to 63.44% in October.
