MIIT: Lead Zinc Industry Status In 2018

Our lead zinc industry maintained a smooth operation in 2018 while downward pressure continued. Downstream consumption was in recession. Price fell after shock and benefits decreased.

Firstly, yield of concentrate decreased and secondary metal presented significant increase. In 2018, due to the factors of environment governance and restrictions on newly constructed mines, yield of lead concentrate and zinc concentrate was 1.33 million tons and 2.84 million tons, respectively YOY down by 5.9% and 4.9%. Domestic self-sufficiency rate of lead and zinc resources decreased continuously. The yield of lead and zinc was 5.11 million tons and 5.68 million tons, respectively YOY up by 9.8% and -3.2%. Among them, with the improvement of utilizing secondary materials of lead and zinc, yield of secondary lead and zinc was 2.25 million tons and 600000 tons, YOY up by 10.0% and 56.8%, accounting for 44.1% and 10.5% of yield of lead and zinc.

Secondly, import volume of lead concentrate decreased and that of zinc increased; lead-acid battery export decreased. In 2018, with the swift development of domestic secondary lead industry, import volume of lead concentrate was 1227000 tons, YOY down by 5.1%; import volume of zinc concentrate and refined zinc was respectively 2.97 million tons and 720000 tons, respectively up by 21.5% and 5.9%. Exported lead-acid battery was 190.163 million sets, YOY down by 3.9%.

Thirdly, price fell after shock and benefit decreased. In 2018, average spot price of lead was RMB 19126/ton, YOY up by 4.1%, while growth rate presented a YOY fall of 22 percent points; average spot price of zinc was RMB 23474/ton, YOY down by 1.7%. Profit of lead zinc industry was RMB 21.4 billion, YOY down by 27.1%. Among it, due to the shock decline of lead zinc price, profit of mining and beneficiation reached RMB 19.3 billion, YOY down by 4.5%; smelting processing fee was at historic lows in the first three quarters, so profit of lead zinc smelting reached RMB 2.1 billion, YOY down by 77.1%.

Fourthly, downstream consumption was not energetic enough and consumption hit a plateau. In 2018, apparent consumption of lead and zinc was 5.2 million tons and 6.48 million tons, respectively YOY up by 9.9% and -0.8%. In our country, lead and zinc consumption mainly rely on domestic demands. With the decline of yield of lead end-consumer goods such as electric bicycle aId auto, and with the growing possibility that lithium-ion battery will replace lead battery in some fields, future consumption in lead industry will not be very energetic. Zinc consumption is mainly driven by national infrastructure and real estate field and correlate consumption of home appliances and auto. Influenced by growth slowdown in these industries and weak consumption, zinc consumption is far from satisfactory. Lead zinc consumption will gradually hit a plateau.

In 2019, with the further promotion of ecological protection and pollution governance, and weak downstream consumption, lead zinc industry is in urgent need of transformation and upgrading, where green development will be the main direction for the whole industry. MIIT will help to advance technical transformation that facilitates green manufacturing in lead zinc industry. We will actively utilize secondary materials to achieve combined smelting, guide secondary lead zinc industry to standard development, enhance comprehensive utilizing ability and improve clean manufacturing and green development in the whole industry.