Metal Products News
- Lead smelters may cut output again
Date: 9-Aug-2007 Sources: (Shenzhen Daily)
RISING prices for imported lead ore may force domestic smelters to reduce lead production further in the second half of this year to cut the use of imported concentrate, industry sources said yesterday.
Lower output would likely curb exports, which fell nearly 50 percent in the first six months, and possibly push world prices even higher.
'Output in the second half should be 10 percent lower than the first half,'said Tang Chenghe, chairman of Anyang Yubei Gold and Lead.
'We cut output by 10 percent in July. If world prices rise further, we will cut more in August and September,'Tang said.
He estimated that about 700,000 tons of lead capacity had been taken out of operation, versus 600,000 tons in June.
'Lead prices may rise to US$4,000 (a ton) in the fourth quarter,'partly in reaction to reduced supplies from China, Tang said. Lower outflow from China has already helped to drive a near doubling this year in world lead price, which was at US$3,275 per ton Monday, near their peak of US$3,500 hit in July.
China's lead exports in June fell nearly 40 percent from May as a result of smelters' output reductions. A 10 percent export tax imposed June 1 curbed exports.
Industry sources said high world prices were boosting costs of imported concentrate and forcing more domestic smelters to cut production.
'As far as we know, all lead smelters in Henan are cutting production,'a trading manager at a 100,000 ton-a-year smelter in Henan Province said.
But Yuguang Gold and Lead, the country's top lead producer, has kept its output target at 300,000 tons this year, according to a board official in Henan.
'For now, we do not have a plan to cut production. But this cannot be ruled out if the situation changes,'the official said.
Tight supplies of concentrate have forced other smelters to delay the startup of about 200,000 tons of capacity until the end of this year from mid-2007, an analyst at State-owned research group Antaike said.
Nevertheless, the country's primary lead output this year may still slightly surpass last year's due to new capacity, he said.
Antaike sees China's lead production, including primary and recycled lead, rising to 2.8 million tons this year from 2.68 million tons last year.
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