Production at 'mixed feed' lead smelters - responding to the tight concentrates market

摘要

Last year, 2017, was marked by a very tight market for lead concentrates, the result of another decline in global mine output coinciding with the continued expansion of primary smelter demand, both in and outside China, and following on from a year which saw a significant depletion of concentrates stocks. The market swung sharply into deficit in 2016, as illustrated by the left hand chart below, as mine cutbacks resulted in a net decline in output of more than 3%, but smelters in Asia continued to demand more concentrates - global primary production increased by 2%. As the deficit persisted into 2017, smelters struggled to source sufficient concentrates, leading some to cut back and, where possible, substitute secondary materials. In this focus we look at the response of ex-China "mixed feed" smelters - those that process significant tonnages of secondary materials as well as concentrates - to the shortfall in concentrate availability and plummeting TCs. We also consider the extent to which concentrate throughput could be lifted again, soaking up any mine production increases.