Constrained release of domestic production capacity Excess amount of refined lead will reduce price volatility will increase

Recently, Zhang Changhai of Beijing Antaike Information Development Co., Ltd. said that the domestic surplus of refined lead will be reduced this year, but the price volatility will increase.
He predicts that the main domestic consumption areas will continue to maintain a growth trend. Lead consumption can still maintain a growth rate of around 10%; the production of recycled lead will increase steadily, but the supply of concentrate will be tighter and limit the increase in refined lead production; China's refined lead is expected in 2011. The excess amount has been reduced to about 100,000 tons. At the same time, inventory will remain at a relatively high level, but the introduction of lead** will increase the role of lead as a financial derivative, and the volatility of domestic prices will increase. It is expected that the 2011 shock range will be mainly between 15,000 and 21,000 yuan/ton. The average annual price is around 17,800 yuan/ton. In addition, in the international market in 2011, the LME lead price on the London Metal Exchange will generally be in a turbulent situation.
As a lead-producing country, the release of China's production capacity involves fluctuations in world lead prices. It is reported that in the past 20 years, China's lead production has gradually expanded from less than 10% of the world's total. Last year, China's lead production accounted for 44.67% of the world's total. According to statistics from China Nonferrous Metals Industry Association, China produced 18.51 million tons of lead concentrate in 2010, an increase of 36.1% year-on-year. According to customs statistics, in 2010, a total of 1.604 million tons of lead concentrate was imported, which was basically the same as last year. However, according to the China Non-Ferrous Metals Industry Association statistics, China's cumulative lead production in 2010 was 4.19 million tons, an increase of 13.3% year-on-year, slightly lower than the increase of 15.6% last year.
Therefore, due to the increase of domestic concentrate production and the stability of imported ore, it still cannot meet the accelerated growth of domestic production capacity, and the release of domestic production capacity is restricted. At the same time, domestic and foreign processing fees are at a relatively low level, and companies are no longer willing to open new production capacity. According to statistics, China produced 3.92 million tons of lead in 2010, with a consumption of 3.75 million tons, and a surplus of 170,000 tons, which is basically in balance. In 2009, domestic lead production surplus reached 354,000 tons.
In terms of lead fundamentals, the global lead surplus gap will also shrink. According to the International Lead and Zinc Research Group (ILZSG) statistics, in 2010, the world's lead production was 9.410 million tons, an increase of 6.0% year-on-year, and consumption was 9.353 million tons, an increase of 6.2% year-on-year. The global lead market is still in a situation of oversupply. The annual surplus was 48,000 tons, compared with an excess of 57,000 tons in the same period of last year.
However, it is worth noting that according to ILZSG statistics, in 2010, the supply of lead in Western developed countries was in a state of shortage. The output of refined lead was 4.737 million tons, an increase of 0.06% year-on-year; the consumption was 4.785 million tons, an increase of 3.1% year-on-year; the annual shortage was 48,000 tons, compared with an oversupply of 93,000 tons in the same period of the previous year.
This phenomenon is mainly due to the continuous recovery of the auto industry in western developed countries this year. The main area of ​​lead consumption is lead-acid batteries, which account for more than 80% of the total lead consumption. According to statistics, the cumulative automobile production in the United States in 2010 was 7.73 million, an increase of 35.5% year-on-year. The cumulative production of German automobiles was 5.55 million, an increase of 11.8% year-on-year. The cumulative production of automobiles in Japan was 9.626 million, an increase of 21.3% year-on-year. South Korea produced cars cumulatively. 4.272 million vehicles, an increase of 21.6% year-on-year.
Therefore, with the global economy recovering steadily and the auto industry in Western developed countries continuing to recover, lead consumption will steadily increase in 2011. However, there are also uncertainties, mainly because of the relatively high inventory levels and the large amount of production capacity that China needs to release.
He analyzed that lead smelting capacity in 2010 increased from 4.45 million tons in 2009 to 4.98 million tons, an increase of about 12%. From a regional point of view, new production capacity is mainly concentrated in major areas of refined lead production in China, such as Henan, Hunan and Yunnan. Therefore, with the release of these capacities, there is still a production space of 1.06 million tons between the output of 3.92 million tons. At the same time, the global lead market inventories have continued to increase. At present, LME’s lead stocks are nearly 300,000 tons. It is worth noting that high prices are accompanied by high inventory. Moreover, it is the first time that high inventory has been maintained during the peak season of consumption.
It is reported that in 2010, the trend of lead prices at home and abroad was generally V-shaped. The price performance was fairly good at the beginning of the year, but it continued to fall in the second quarter and began to oscillate in the second half.
In March last year, LME lead remained at 2100-2300 U.S. dollars per ton for most of the first quarter of 2010, but it continued to decline at the end of April and reached a minimum of 1,535 U.S. dollars per ton on June 7. Then it bottomed out and rebounded. At the end of July, it rose to more than 2,200 U.S. dollars per ton. At the end of October, it rose to more than 2,500 U.S. dollars, but it declined at the end of the year. The domestic market and the international market have the same trend. The spot price of the domestic capital market maintained at more than 16,000 yuan at the beginning of the year, but it dropped to about 14,000 yuan in June, and then rebounded after the shock. It recovered to about 17,000 yuan in December.