The Most Essential and Authoritative Source for Chinese Metals … · miners and smelters were forced to suspend operation in Hechi. During the regulation, there were a total of 150

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The Most Essential and Authoritative Source for Chinese Metals Market

Lead, Zinc & Tin Monthly May 2012 No. 185

INSIDE THIS ISSUE Highlight Lead and zinc production resuming in Hechi, Guangxi..................................….1

Market overview Zinc………………………………………………………...……………………2

Lead………………………………………………………………....………..12

Tin……………………………………….…………………………………….19

News in brief

Policies and Industrial News………………….......................24

Ningxia based lead smelters and battery manufacturers forced to be in clean

production……………………………………………………………….…....24

9 Pb-Zn-Au exp lor ing l i censes re leased in Chi feng o f Inner

Mongolia………………………………………………………………………24

Hebei to set daily supervising mechanism over dangerous waste treating

processes…………………………………………………………………….…25

Miners & Smelters…………………………..…………….…25

Chihong fails to fulfill production plan for 2011…............................................25

A 60ktpy lead smelting project commissioned in Ningyuan of Hunan……..…25

Hechi Nanfang Co., Ltd. fully resumes production……………………………26

Downstream News…………………………..………………..28

A battery recycling project commissioned in Shanxi……………………….....28

Domestic small lead acid battery manufacturers to be widely merged or

eliminated………………………………………...…………………………….29

Statistics Chinese lead, zinc and tin output in Mar. 2012……………………………...30

Chinese Lead in Concentrate Output by Region in Mar. 2012………………30

Chinese Refined Lead Output by Region in Mar. 2012………………………..30

Imports and Exports of Lead Products in Mar. 2012………………………......32

Lead, Zinc & Tin Monthly, May 2012 No. 185

2 Website: www.antaike.com

Highlight

Lead and zinc production resuming in Hechi, Guangxi

The Hechi Govt. of Guangxi Zhuang Autonomous Region spent big force in regulating the local heavy

metals related companies after the cadmium pollution incident happened in Longjiang River in Hechi

City in middle January this year. Guangxi is one of the major lead and zinc mining and smelting regions

in China, and a big part of the capacity is distributed in Hechi City. Nearly all the local lead and zinc

miners and smelters were forced to suspend operation in Hechi.

During the regulation, there were a total of 150 minerals mining, concentrating and smelting

operations closed or suspended production in late January and early February. Among which, there were

50s smelters concerning combined refining capacity of 170ktpy lead and 380ktpy zinc.

Up to the end of April, the Hechi Govt. had partially finished the regulation and authorized two

batches of the suspended enterprises to restart production. For lead, Guangxi Chengyuan Smelter has

restarted operation, which has capacity of yielding 80kt of refined lead each year. For zinc, the resumed

smelters include Hechi nanfang Co., Ltd., Nandan Jinshan Indium & Germanium Co., Ltd., Hechi Jintai

Resources Recycling Co., Ltd. and Nandan Jilang Indium Co., Ltd.. The total resumed capacity reaches

325 kt of refined zinc per year. The resumed mining & concentrating capacity concern Chehe Dressing

Plant and Tongkeng Mine of China Tin Group and the operations of Guangxi Gaofeng Mining Co., Ltd..

The combined concentrating capacity of those operations is 4.4 Mt/y.

Though restarted production, those operations are still facing many difficulties from the reopen of

facilities and recollection of staff. It still needs a term for those operations to resume to normal

production as before the regulation.

Market Overview

Zinc

Zinc price fluctuates on a platform in April

The LME zinc prices were moving in a platform in the most time of April. In late of the month, the

prices became stable and represented a rebound. During the month, the LME zinc prices moved at

US$ 1,950-2,050/t in early April, which were still under the press of the raised worry for the financial

risk in Spain. In middle of the month, the dollar index turned down, but the zinc prices didn’t show

obvious rebound. At the end of April, the U.S. house data was better than anticipation, while the worry

for European economy was partially eased by the strong demand for selling tender of European countries’

debt. The situation stimulated the zinc price to rebound. The monthly average price of LME 3-month zinc

was US$ 2,004/t in April, down by 2.1% m-o-m and 16.1% y-o-y. The average price of cash month zinc

was US$ 1,996/t, down by 1.9% m-o-m and 15.9% y-o-y.



LME 3-month zinc price

Sources: LME, Antaike

The SHFE zinc prices were basically following the LME market in April. By the end of the month, the

domestic zinc prices rebounded in a range. The monthly average price of SHFE 3-month zinc was RMB

15,323/t in April, down by 1.2% m-o-m and 12.6% y-o-y. The average price of SHG zinc in domestic

spot market was RMB 15,244/t, down by 1.4% m-o-m and 13.8% y-o-y.

SHFE zinc mainstream contract price Sources: SHFE, Antaike



Zinc price on LME and SHFE

LME 3-month ($/t)

LME cash-month

($/t)

SHFE 3-month (yuan/t)

Domestic SHG zinc

spot (yuan/t)

LME inventory(t)

SHFE inventory(t)

2009 1,680 1,655 21,375 13,740 496,700 222,660

2010 2,186 2,160 19,695 17,365 701,425 310,735

Jan-11 2,383 2,371 18,933 18,390 710,275 326,210

Feb-11 2,489 2,465 19,404 18,768 708,300 335,096

Mar-11 2,364 2,341 18,492 17,865 736,225 370,622

Apr-11 2,389 2,372 17,538 17,680 821,375 394,631

May-11 2,180 2,160 16,721 16,630 854,550 400,128

Jun-11 2,251 2,230 17,215 17,098 863,475 400,768

Jul-11 2,418 2,390 18,245 17,950 889,550 400,571

Aug-11 2,239 2,211 16,866 16,917 855,550 417,784

Sept-11 2,100 2,076 15,755 16,098 821,325 401,273

Oct-11 1,880 1,859 14,997 15,000 780,875 375,288

Nov-11 1,941 1,935 15,222 15,114 739,850 368,939

Dec-11 1,845 1,827 15,161 15,020 821,700 364,186

Jan-12 1,994 1,980 15,354 14,950 844,300 369,698

Feb-12 2,076 2,059 15,978 15,579 867,550 383,127

Mar-12 2,048 2,034 15,514 15,459 897,375 376,711

Ape-12 2,004 1,996 15,323 15,244 913,630 358,489

Sources: LME, SHFE, Antaike

The zinc inventory

The LME zinc inventory was climbing continuously in April, which touched 913,630 tonnes on April

30, creating a historical new high. By regions, the additional zinc inventory was mostly occurred in North

America and Europe that implies the zinc demands in the key zinc consuming regions are still weak.

Different from LME, the zinc inventory in SHFE declined to 358,489 tonnes by the end of April, down

by 17,616 tonnes against the end of the previous month. On the one side, the zinc smelting operations in

Guanxi and Guangdong were affected by the environmental protecting regulation. Accordingly, the zinc

stockpiles were consumed in a range in the regions. On the other side, the current zinc price is near the

production cost of zinc refineries that forces some operations to cut production. Moreover, some smelters

were reluctant to sell zinc in such a low level. Those factors jointly lead the SHFE zinc inventory down.

The subtotal zinc inventory in LME and SHFE exceeded 1.27 Mt by the end of April, similar with a

month ago. Besides, the zinc stockpiles in Chinese users and traders are quite big on the soft downstream

demands. The big zinc inventory draws down the anticipation for zinc consumption and put a stress on

the future zinc prices. It is still in the consuming pick season, but the inventory doesn’t show a decrease.

So, it would be difficult to reduce the big stocks in the next period.



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Zinc Inventory in LME Zinc Inventory in SHFE LME 3-month Zinc Monthly Average

LME 3-month zinc price, LME zinc inventory and SHFE zinc inventory

Zinc conc. production

China produced 1.014 Mt of zinc in conc. in Jan.-Mar. this year, up by 20.2% y-o-y, according to

CNIA. The Chinese zinc mine production was still normal in April. Some small miners’ production was

affected more or less by cash flow tightness, but which influenced the nation’s total zinc conc. production

little.

However, the CNIA’s statistics should be adjusted in some regions: Based on the CNIA data, Guangxi

produced 91 kt of zinc in conc. in Jan.-Mar., up by 41% compared with the same period of the previous

year. Actually, however, the local mining companies in Hechi City of Guagnxi were in suspension for

near 2 months in the first quarter this year, which resumed production after early April. So, the big

growth of zinc mine production could not be seen. Meanwhile, the zinc in conc. production in Inner

Mongolia increased by 51% y-o-y to 216 kt in Jan.-Mar. in accordance with the data. But, local miners

reflect the weather was pretty cold earlier this year in the region, and they were forced to delay the

re-open time somehow compared with a year ago. In that case, the big increase of output was

unreasonable in Inner Mongolia in the first 3 months. Totally, the Chinese zinc in conc. output increase

rate should be less than 20%. The production kept stable growth in April, but the rate may not rise

further.

Currently, the zinc conc. price has become an active support to the domestic zinc price. The quotation

of zinc conc. remained at around RMB 11,000/t, while the TC of homemade and imported materials was

at RMB 4,400-4,900/t and US$ 80-100/t, respectively. The TC of imported zinc conc. was in uptrend in

the past month that was mainly because of the shorter demand on the production reduction in domestic

smelters. Even though, the Chinese zinc smelters are still less interested in importing. They find it more

profitable in adopting homemade conc. rather than imported one. In that case, the zinc conc. import saw a

yearly decrease in March.



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Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2010 2011 2012

Chinese zinc in conc. production

Refined zinc production

The data from CNIA show China produced 406 kt of refined zinc in Mar., down by 9% on a yearly

basis. The accumulative zinc output in the first 3 months was 1.182 Mt, down by 3.7% y-o-y. On one side,

the domestic zinc smelters controlled their production on the consideration of high zinc inventory, weak

downstream demands and the relative low zinc price. Meanwhile, the environmental protection

regulation and the eliminating campaign of backward capacity affected the domestic zinc production too.

The zinc smelters in Hechi of Guangxi were forced to suspend production in Feb.-Mar. due to a pollution

incident. Though, most of those suspended capacity restarted in early April, they still need a term to

resume normal production. Hechi produces about 300kt of refined zinc each year. The output in the city

may still affect the nation’s total zinc production data in April. Besides, Henan Yuguang Gold & Lead Co.,

Ltd. suspended the production of a 100ktpy zinc smelting & refining system for facility maintenance in

April. The timetable for restart is still unknown. The other key zinc smelters mostly failed to realize full

operation. So, the Chinese refined zinc production growth should be lower than the same period of recent

years.

Several listed zinc production companies released financial report for Q1, most of which show deficit

or big decrease of profit in account. The decline of profit was mainly due to the much lower zinc price,

weak demands and higher production cost. The domestic zinc smelters are experiencing a hard time that

affects the production directly.



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2010 2011 2012

Chinese refined zinc production

Zinc consumption

The Chinese zinc consumption was still weak in the traditional pick season so far this year. The

transaction didn’t resume to similar level with the same period of last year. In April, the operation rate of

galvanizing plants rebounded a bit against March, but the soft downstream demand made those

galvanizing operations less activity in production. China produced a total of 3.305 Mt of placed sheet in

Mar., up by 15.2% y-o-y.

There was a new galvanizing production line commissioned in late March, which belongs to Tianjin

Xinyu Company. The operation has capacity of producing 200ktpy galvanized sheet.

The low price and the soft demands have forced some galvanizing companies exit from the market.

The existing manufacturers operates mainly in accordance with the order forms. In that case, the

additional stockpiles reduced, while the old stocks were consumed partially. The current galvanized

products inventory has been declined to a relative low level that supports the galvanized sheet price more

or less. However, the weak demand is still a big disadvantage on the market. The consuming pick season

in Mar.-Apr. has passed. The galvanized sheet price and consumption would be stable but less possible to

show big growth in the coming month.



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Chinese galvanied plate output Chn yoy %

Chinese galvanized plate production

According to the statistics released by China Association of Automobile Manufacture (CAAM),

Chinese automobile production and sales was 4.78 mln units and 4.79 mln units in the first quarter, down

by 1.8% and 3.4% y-o-y. Though showing a negative growth in the first quarter, the Chinese automobile

sector’s data was rebounding month by month in the period. The Chinese automobile production and

sales was 1.88 mln units and 1.83 mln units in March, up by 16.9% and 17.3% m-o-m, and up by 3.4%

and 1.0% y-o-y, which was in the highest level in among the same month of the past 3 years. According

to the trend in the first 3 months, the Chinese automobile industry is likely to realize an increase rather

than decline in production and sales this year.

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Auto output Chn yoy %

Chinese automobile production Source: CAAM



The home appliance market was a bit better in March against the previous month. The output of

washing machine, refrigerator and air condition respectively increased by 2.3%, 7.8% and -3.4% y-o-y to

5,811 thousand units, 7,962 thousand units and 14,129 thousand units in March. In the first 3 months, the

accumulative output of the three commodities was 14,972 thousand units, 19,802 thousand units and

33,783 thousand units.

The export of domestic home appliance products was lower than anticipation mainly due to the debt

crisis extension in Europe and the low speed resumption of U.S. economy. This year, the growth of home

appliance products annual growth rate may decline to below 10%, which would affect the production in

the sector. However, the domestic rigidity demand would support the consumption, while the pick season

is coming. So, the production and sales in the sector will maintain a stable growth, though would be

lower than the same period of last year.

Chinese home appliance production in Mar., 2012, thousand units Commodity Mar. Chn (yoy) Jan.-Mar. Chn (yoy)

Washing Machine 5,811 2.3% 14,972 -2.8%

Refrigerator 7,962 7.8% 19,802 10.5%

Air Conditioner 14,129 -3.4% 33,783 -4.4%

Source: NBS

The development speed of Chinese real estate market kept in downtrend in March. The statistics from

NBS show that China invested totally RMB 1,092.7 bln in real estate sector in Jan.-Mar., up by 23.5%

y-o-y; the growth rate was lower by 4.3 points against Jan.-Feb.. Among which, the investment in

resident buildings was RMB 744.3 bln, up by 19%, accounting for 68.1% of the total investment. In the

first 3 months, the Chinese sold building area was 152.39 mln square meters, down by 13.6% y-o-y. In

the 70 big and middle cities, the newly built commercial houses and apartment price index declined in

March both on monthly and yearly basis. The Chinese govt. still holds strict and tight policies for real

estate industry. Some of the real estate enterprises’ cash flow would be tightened; while the house price

would be hard to show big increase in short term. Accordingly, the development speed of the sector

might slow down further in the next several months.

Generally, the market participators especially zinc users and traders widely hold pessimistic opinions

for the zinc consumption in the first half of this year on the macro control over Chinese real estate sector

and the shrunk foreign demands.

Foreign trade of zinc conc. and refined zinc

China imported 534 kt of zinc conc. (physical weight) in Jan.-Mar., down by 26.7% y-o-y, according to

the statistics released by China Customs. The import in Mar. was 153 kt, a bit lower than the previous

month. Meanwhile, China imported 131 kt of refined zinc in the first 3 months, up by 50.25% y-o-y; the

import in March was 45 kt, up by 20.2%.

The zinc conc. import showed a 32% decline to 153 kt in March, which is in the lowest level after Nov.,

2008. By country, most of the zinc conc. import decrease was happened in Peru. Besides, the domestic

demands for zinc conc. slipped because some zinc smelters suspended and maintained facilities, while

some others were affected by environmental protecting regulation. Moreover, the Chinese zinc mine

production was activity that provided relative rich material supply. Those factors jointly controlled the

demand for zinc conc.

China imported 45 kt of refined zinc in Mar., up by 20.2% y-o-y. In the first 3 months, the refined zinc



import was 131 kt, up by 50.2% y-o-y. There are several key reasons for the big growth of the import:

domestic zinc smelters suffered serious lost in operation, some of which turned to import refined zinc

partially replacing production for the purpose of reducing lost; the demand for financing through

importing zinc is higher than the same time of last year; the tariff of refined zinc was adjusted to 1% from

3% after July, 2011 that reduced the cost of traders and made them more interested in importing zinc.

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Tonne

Import Export

China’s refined zinc import and export

Chinese zinc conc. import by country Unit: Tonne (physical weight)

Country Mar. Chn y-o-y (%) Jan.-Mar. Chn y-o-y (%)

Australia 47,033 -11.34 198,833 -24.71

Turkey 24,320 336.49 33,440 64.15

Peru 17,237 -74.55 56,589 -67.67

Mongolia 12,449 32.14 30,375 -16.85

Russia 11,713 18.5 25,846 9.84

Burma 9,653 -1.09 15,419 -37.14

Kazakstan 6,252 -51.91 13,233 -60.69

Canada 5,466 - 23,648 -

Spain 4,553 - 7,787 -

Ireland 2,830 - 9,252 152.13

Morocco 2,271 -49.89 6,386 -46.03

Nigeria 1,902 -58.91 3,771 -60.76

Montenegro 1,390 - 1,390 -

DPRK 1,154 128.86 2,789 52.85

Mexico 1,031 -1.76 1,851 -80.69

Bolivia 993 -67.18 1,946 -64.45

Guatemala 887 - 1,821 -

Serbia 818 - 818 -8.97



Country Mar. Chn y-o-y (%) Jan.-Mar. Chn y-o-y (%)

Vietnam 452 -68.24 534 -86.65

Thailand 348 -66.89 2,033 -37.09

Iran 176 -92.89 7,187 134.72

Brazil 160 - 1,097 2,366.28

Indonesia 118 -78.39 895 8.55

Total 153,206 -31.85 534,476 -26.67

Source: China Customs

Forecast:

The latest employment data and PMI in Euro Zone and the biggest economic body – Germany are both

not very well, which show bigger risk for economy downtrend. In that case, the Euro would be

influenced. Meanwhile, some key economic data in the U.S. are weaker than anticipation. Moreover, the

official saying of FED indicates the QE3 would be unlikely to be released unless serious decline of

economy is seen. The press supports the dollar index and affects the metal prices.

In zinc market itself, the huge inventory makes it less possible for the zinc prices to show big rebound.

Meanwhile, the slowed down production growth rate would not stimulate the price effectively. On the

contrary, after the zinc price becomes re-stable and in uptrend, the Chinese zinc refineries would recover

production. Then, the oversupply would put stress on the price again. However, the rising production cost

as well as the weak downstream demands especially in pick season has extruded the refineries’ profit. In

that case, the further decline room of zinc prices is limited.

In the coming month, the zinc prices will still fluctuate in short range on the unclear trend of market

fundamentals and macro economy. The market has basically understood the fact of European debt crisis

and the slowed down of the U.S. economic resumption. The zinc prices may be in uptrend but slowly in

May. The LME 3-month zinc price will be in US$ 1,950-2,180/t in May, while the SHFE mainstream

zinc contract price will be RMB 15,300-16,300/t.

Table 5: Chinese refined zinc market balance (kt)

Production Import Consumption Export Balance

2008 3,942 183 3,820 71 234

2009 4,186 670 4,310 29 517

2010 5,210 320 4,950 40 540

2011 5,020 350 5,200 50 120

2012e 5,000 380 5,400 30 -50

Source: Antaike (“e” means estimate)



Lead

Lead price rebounds in April

The LME 3-month lead price was mainly in uptrend in April. The 3-month lead opened at US$ 2,037/t

at the beginning of April. The price fluctuated in the first half of April and climbed continuously in the

second half of the month. It touched a monthly high of US$ 2,165/t and closed at US$ 2,148/t at the end

of the month, up by 5.2% compared with a month ago. The average price of LME 3-month lead was

US$ 2,078/t in April, almost unchanged with that in March, but down by 22.2% y-o-y. The LME

cash-month lead price averaged at US$ 2,074/t in Apr., up by 0.8% m-o-m and down by 23.7% y-o-y.

1,000 1,200 1,400 1,600 1,800 2,000 2,200 2,400 2,600 2,800 3,000

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US$/tTonneLME lead inventory and 3-month price

LME lead inventory LME 3-month lead price

The SHFE lead contracts were mainly following LME in April. The mainstream lead price opened at

RMB 15,530/t at the beginning of the month, which was in the lower level during the month. Then, it

fluctuated and increased between RMB 15,530-15,900/t. It closed at RMB 15,820/t at the end of the

month. up by 1.6% compared with the end of the previous month. The monthly average price of SHFE

mainstream lead contract was RMB 15,671/t in Apr., down by 0.9% m-o-m and 14.7% y-o-y. The

domestic spot lead price averaged at RMB 15,590/t in Apr., down by 1.0% m-o-m and 9.9% y-o-y.

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Yuan/t SHFE Lead mainstream future contract



1,800

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14,000 14,500 15,000 15,500 16,000 16,500 17,000 17,500 18,000 18,500

US$/tYuan/tRefined lead prices on LME and Chinese spot market

shanghai Huatong lead price LME cash-month lead price

Lead price on LME and SHFE

LME 3-month (US$/t)

LME cash-month

(US$/t)

SHFE 3-month (RMB/t)

Domestic lead spot (RMB/t)

2009 1,731 1,721 - 13,743

2010 2,171 2,147 - 16,100

2011 2,392 2,404 - 16,346

Apr-11 2,683 2,740 18,435 17,306

May-11 2,403 2,420 16,842 16,142

Jun-11 2,533 2,525 16,892 16,169

Jul-11 2,696 2,681 17,463 16,867

Aug-11 2,395 2,393 16,739 16,341

Sept-11 2,269 2,288 15,788 15,640

Oct-11 1,968 1,960 14,841 14,878

Nov-11 2,017 1,994 15,277 15,322

Dec-11 2,044 2,025 15,382 15,369

Jan-12 2,125 2,100 15,589 15,482

Feb-12 2,152 2,121 15,998 15,830

Mar-12 2,076 2,057 15,815 15,743

Apr.-12 2,078 2,074 15,671 15,590

Sources: LME, SHFE, Antaike

Supply

Lead conc. production

The statistics released by China Nonferrous Metals Industry Association (CNIA) show that China

produced accumulative 610 kt of lead in conc. in Jan.-Mar., up by 35% compared with the same period of

the previous year. The production in March was 265 kt, up by 35.5% m-o-m and 55% y-o-y. Except

Guangdong Province, all key lead mine producing regions saw production growth in March. The lead

miners’ production was affected by blood lead incident, which led to a big decline of production in the

province.



Antaike finds in survey that most lead miners have no expending plan, while the additional mining

projects are supposed not enough to support such a high speed production increase. Among key

producing regions, Sichuan and Hunan represented rapid growth of lead mine production, while Inner

Mongolia kept low speed growth. According to Antaike’s primary statistics, Chinese lead in conc. output

was approximately 490 kt in Jan.-Mar., up by around 27% on a yearly basis.

020,00040,00060,00080,000

100,000120,000140,000160,000180,000200,000220,000240,000260,000280,000

Jan.

10

Mar

. 10

May

. 10

Jul.

10

Sep

t. 10

Nov

. 10

Jan.

11

Mar

. 11

May

. 11

Jul.

11

Sep

t. 11

Nov

. 11

Jan.

12

Mar

. 12

TonneChinese lead-in-conc. output

The domestic mainstream TC of lead conc. was about RMB 1,700/t in April, lower by RMB 200 against the

previous month. Meanwhile, the TC of imported lead conc. was US$ 80/t in April, much less than US$ 110/t a

month ago.

Refined lead production

According to the statistics released by CNIA, China produced a total of 896 kt of refined lead in

Jan.-Mar., 2012, up by 0.8% on a yearly basis. The annual increase rate in the early months this year was

much lower than that of last year. The govt. enhances the force in environmental protecting regulation

over lead related sectors. Those enterprises failed to meet the requirement are ordered to be in suspension

for adjustment. Meanwhile, the lead price is in a relative low level. In that case, the lead smelters are not

active in production, and the Chinese refined lead output was basically stable in Jan.-Mar. Among key

producing regions, Henan, Hunan, Yunnan and Hubei produced 342 kt, 221 kt, 84 kt and 83 kt,

respectively, up by 8.4%, 13.6%, 8.3% and 49.7% compared with the same period of the previous year.

The secondary lead production was still weak in the first quarter. The key production regions - Jiangsu

and Anhui yielded 39 kt and 17 kt of refined lead in Jan.-Mar., respectively, down by 13.9% and 12.7%

on a yearly basis. The suppliers of used acid battery are reluctant to sell the material in relative low level

that leads to a decline of secondary lead production. Moreover, some secondary lead operations are still

in suspension affected by industrial regulation for protecting environment.



Consumption

Statistics from National Bureau of Statistics (NBS) show that Chinese lead acid battery output was

37.67 mln kvah in Jan.-Mar., 2012, up by 14.4% y-o-y. In Mar., the national total lead acid battery output

was 14.59 mln kvah, up by 23.4% y-o-y. The real consumption of lead was 1.08 Mt in the first quarter, up

by 17.8% against the same term of the previous year, according to Antaike’s statistics.

0

2000

4000

6000

8000

10000

12000

14000

16000


thousand kvah

2009 2010 2011 2012

Chinese lead acid battery production

China’s automobile production and sales resume in March

The Chinese automobile production and sales resumed further in March this year, according to the

China Association of Automobile Manufacturers (CAAM). The production and sales still saw a decrease

in Q1 against the same period of last year, but the decrease range shrank compared with that in the early

months.

China produced 1.88 mln units of automobiles in March, up by 16.9% compared with the previous



month and up by 3.4% against the same month last year. Meanwhile, the sales quantity was 1.84 mln

units, up by 17.3% against the previous month and up by 1.0% against the same period last year.

In the first 3 months, the Chinese automobile production and sales was 4.78 mln units and 4.79 mln

units respectively, down by 1.8% and 3.4% on a yearly basis, lower than that in the first 2 months.

Chinese automobile production and sales in March 2012, thousand units Mar. MoM chn (%) YoY chn (%) Jan.-Mar. YoY chn (%)

Production

Total 1,880.6 16.90 3.38 4,784.3 -1.83

Passengers’ car 1,455.8 15.40 5.87 3,771.2 1.10

Commercial

vehicle

424.8 22.35 -4.32 1,013.1 -11.40

Sales volume

Total 1,838.6 17.33 1.02 4,792.7 -3.40

Passengers’ car 1,400.0 15.40 4.54 3,773.7 -1.25

Commercial

vehicles

438.6 23.92 -8.80 1,019.0 -10.60

Source: CAAM

Chinese motorcycle production & sales in March

The Chinese motorcycle production and sales kept rebounding in March, but still lower than that same

month of last year, according to the statistics released by China Association of Automobile Manufacture

(CAAM). In the first quarter, both the production and sales of motorcycles showed nearly 9% decline

against Q1 2011.

China produced 2.09 mln sets and sold 2.07 mln sets of motorcycles in March, respectively up by

15.37% and 12.24% compared with the previous month and down by 10.24% and 9.85% against the

same month last year. In the first 3 months, the domestic motorcycle production and sales was 5.54 mln

sets and 5.63 mln sets, down by 8.81% and 8.82% against the same period of the previous year.

Chinese motorcycle output & sales volume in March 2012, thousand units

Mar. Chn mom (%) Chn yoy (%) Jan.-Mar. Chn yoy (%)

Output

Total 2,098.2 15.37 -10.24 5,541.3 -8.81

Two wheels 1,882.8 15.13 -11.01 5,002.5 -9.68

Three wheels 215.4 17.53 -2.95 538.8 0.19

Sales volume

Total 2,069.1 12.24 -9.85 5,629.9 -8.82

Two wheels 1,855.8 11.96 -10.57 5,095.1 -9.61

Three wheels 213.3 14.76 -3.12 534.8 -0.62

Source: CAAM

In communication sector, China produced accumulative 30.24 mln channels of mobile communication

station equipment in Jan.-Mar. this year, up by 99.1% y-o-y; higher by more than 60 points against the

first 2 months, according to statistics released by NBS. The output was 10.43 mln channels in March, up

by 78.4% y-o-y. The Ministry of Industry and Information Technology held a conference on March 20th,



on which, the Chinese Broadband networks Promoting and Accelerating Project was formally started up.

So, it is expected the demands for the communicating equipment will become stronger, which will raise

the demand for lead acid batteries.

Based on statistics of China Customs, the export of SLI batteries was 1.7 mln units in March, up by

33.7% m-o-m and 25.2% y-o-y. The export of other lead acid batteries was 11.07 mln units in March, up

by 50.2% m-o-m and down by 1.4% y-o-y.

Chinese lead acid battery imports and exports in Jan.-Mar. 2012

Unit: unit

Imports Exports

Mar. Jan.-Mar. Chn y-o-y (%) Mar. Jan.-Mar. Chn y-o-y (%)

SLI 336,294 865,396 179.20 19,642,192 47,574,046 1,062.23

Others 402,317 919,423 41.12 9,152,275 20,449,982 -34.27

Source: China Customs

Foreign trade of refined lead and lead conc.

According to customs statistics，China imported 523.4 t of refined lead in Mar., 2012，down by 61 t

compared with the previous month, and changed little against the same month of the previous year. There are

not too much opportunities for arbitrage in April, lower than March. So, the import of refined lead will be in

uptrend steadily in the following months, while the export data will be still zero.

0

500

1,000

1,500

2,000

2,500

Jan. 11

Mar. 11

May. 11

Jul. 11

Sept. 11

Nov. 11

Jan. 12

Mar. 12

TonneChinese refined lead impot and export

Import Export

Chinese refined lead import and export

China imported 3.8 kt of lead alloys in Mar.，down by 13.4% m-o-m and 10.7% y-o-y; the export was 261.7

t, up by 271.4% m-o-m and down by 69.1% y-o-y. The lead semis import was 91.7 t in Mar., down by 50%

m-o-m and 18.2% y-o-y; the lead semis export was 1.57 kt, down by 11.2% m-o-m and 70.2% y-o-y.

China imported 148 kt of lead conc. (physical weight) in Mar., down by 11.7% m-o-m and up by 46.0%

y-o-y. The domestic lead mines’ combined operation rate increased steadily in recent months, while the TC of

foreign lead conc. was in downtrend at the main time, which are the key reasons for the decline of lead conc.

import.



0

25,000

50,000

75,000

100,000

125,000

150,000

175,000

200,000Jan. 10

Mar. 10

May. 10

Jul. 10

Sept. 10

Nov. 10

Jan. 11

Mar. 11

May. 11

Jul. 11

Sept. 11

Nov. 11

Jan. 12

Mar. 12

Tonne

Chinese lead conc. import (physical weight)

Chinese lead import and export

Unit: tonne

Import Export

Mar. 2012 Chn mom

(%)

Chn yoy

(%) Mar. 2012

Chn mom

(%)

Chn yoy

(%)

Lead conc. (physical

weight, kt） 148 -11.7 46.0 0 - -

Refined lead 523.4 -10.3 0 460.7 - 8.0

Lead alloys 3,829.1 -13.4 -10.7 261.7 271.4 -69.1

Lead semis 91.7 -50.0 -18.2 1,575.1 -11.2 -70.2

Source：China Customs

Market outlook

The global economy would be less possible to bring big good news to lead market. The U.S. economy is

struggling for slow resuming. The European economy is facing the trouble of huge debt – participations think

if there were no bad news, it should be good news. The Chinese economic development is slowing down. In

that case, a single good economic data would be hard to bring too much reflect from the market. On the

contrary, a disadvantage once comes out will strike the market confidence immediately. If so, the lead price

would be affected and may face down further.

The lead consumption in Europe and the U.S. would not show big growth in the second quarter, while the

supply would be stable. In China, the second quarter is the slack season for lead acid battery replacement,

which provides less support for lead consumption growth. Meanwhile, the smelters’ production willing is not

strong, which only kept relative low operation rate. Moreover, the raise of production cost in worker force,

power, etc defends the lead price from further decline too.

The LME 3-month lead price will be at US$ 1,900-2,100/t; SHFE mainstream lead contract price will be at

RMB 15,100-16,000/t; domestic spot lead price will be around RMB 15,500/t in May, Antaike estimates.



Chinese refined lead market balance, kt

2008 2009 2010 2011e Mar.

2012

Jan.-Mar.

2012

2012

Refined lead production 3,153 3,550 3,923 4,262 329 896 4,603

Consumption 2,903 3,328 3,750 4,005 410 1,080 4,405

Net export 3 -134 1.6 0 0 1 0

Balance 247 356 171.4 257 -81 -183 198

Sources: CNIA, Antaike

Tin

Price

LME 3-month tin ran between $21,000 - 23,200/t with shake in April. The average price of cash month

tin and 3-month tin in April of 2012 were $22,115/ t and $22,184/ t, down by 3.8% and 3.7% m-o-m, and

down by 31.6% and 31.5% y-o-y.

The debt problems in Spain and Italy made the market worried about European debt crisis again in

April. The yield at Spain and Italy increased in early April. And the market didn’t relax until the yield fell.

After that, Spanish debt auctions became the focus of market. On April 20, the G20 leading industrial and

emerging market economies have agreed to boost the IMF's lending capacity with commitments that

would increase the institution's resources by more than 430 billion US dollars, a move that will protect

the global economy from the damage of European debt crisis. Chinese economy is also the cause for

concern. Although The March PMI climbed to 53.1 percent, 2.1 percentage points higher than February,

the March CPI and Q1 GDP were all not expected. And for USA, the economic recovery was not strong

as the market expected, there were still some unbalanced factors in the data announced in April.

The average tin price on domestic spot market was 165,676yuan/t in April of 2012, down by 3.0%

m-o-m, and down by 20.9% y-o-y. The spot tin price continued to decline in most of time in April, and

only kept stable for five days with 164,000yuan/t in late April. The transaction was still weak in April.

Most of the downstream enterprises continued to purchase tin as per order condition, while the smelters

was reluctant to sell out as the high price of raw material.

Table Sn-1 Tin prices and inventory (2007 – 2012)

LME US$/tonne Chinese spot market

yuan/tonne Cash month 3 month Inventory

2007 Ave. 14,529 14,520 12,100 121,592

2008 Ave 18,499 18,489 7,790 142,845

2009 Ave 13,613 13,428 26,765 108,692

2010 Ave 20,408 20,442 16,275 145,579

2011 Ave 25,998 25,998 12,190 190,033

Jul. 2011 27,398 27,463 20,865 200,024

Aug. 2011 24,057 24,135 22,625 196,174

Sep.2011 22,525 22,572 21,350 189,190



LME US$/tonne Chinese spot market

yuan/tonne Cash month 3 month Inventory

Oct.2011 21,869 21,900 16,445 181,563

Nov.2011 21,292 21,314 12,490 176,727

Dec.2011 19,387 19,433 12,190 159,295

Jan. 2012 21,548 21,601 9,100 168,700

Feb. 2012 24,293 24,340 10,470 176,452

Mar. 2012 22,985 23,044 13,080 170,783

Apr. 2012 22,115 22,184 14,515 165,676

Chart Sn-1 Tin price on Chinese spot market

Production

According to the China Nonferrous Metals Industry Association’s (CNIA) statistics, Chinese refined

tin output in March was 13,626t, up by 15.0% m-o-m, and up by 13.1% y-o-y. Overall, the refined tin

output in March was stable. The drought in Yunnan didn't have too much effect on production. But, as the

continuous weak demand for tin, the market showed oversupply on refined tin recently, which may blow

smelters' enthusiasm of production. Chinese cumulative output of refined tin from January to March in

2012 was 35,629t, up by 0.6% y-o-y.

Chinese tin-in-concentrate output in March was 10,013, up by 61.3% m-o-m, and up by 6.3% y-o-y. It

was different with refined tin, the supply of tin-in-concentrate was tight recently. In addition, the

cadmium pollution in Hechi of Guangxi has been controlled in late March, and tin miners there were

allowed to restore the production. Chinese cumulative output of tin-in-concentrate from January to March

in 2012 was22,431t, down by 1.8% y-o-y.



Chart Sn-2 Chinese output of refined tin and tin-in-conc. (Jan, 2010 - Mar, 2012)

Table Sn-2 Chinese output of refined tin and tin-in-conc. (March, 2012）

Refined tin Tin-in-conc.（the amount of metal）

March Jan-Mar

y-o-y/% March Jan-Mar

y-o-y/% /t /t

Yunnan 7,097 19,066 -4.77 1,887 6,918 -9.51

Guangxi 1,758 5,095 -22.24 1,200 2,259 -25.57

Jiangxi 1,234 3,204 73.47 378 1,034 30.72

Hunan 2,731 6,425 18.39 5,854 10,992 4.59

Jiangsu 706 1,520 26.35 / / /

Zhejiang 11 61 -17.57 / / /

Inner Mongolia / / / 418 530 91.34

Fujian / / / 230 630 19.32

Guangdong 49 210 7.69 46 68 9.68

Anhui 40 48 / / / /

National total 13,626 35,629 0.64 10,013 22,431 -1.83

Source：CNIA

The output of small electronic products like mobile phone and laptop increased obviously in March.

While the growth of household appliance products was more inferior, and most of them showed negative

growth. The export, the policy of "trade in old home appliance for a new one", "home appliances going

to the countryside", and the of real estate market, were all the reasons for weak growth of the traditional

household appliances industry.



Table Sn-3 Production of Electronic Products in 2012

March Jan-Mar Chn yoy %

Household washing machine mln units 5.81 15.21 -1.9

Household refrigerator mln units 7.96 19.95 6.9

Household Ice-box mln units 1.68 4.06 -2.4

Air conditioner mln units 14.13 35.61 -1.2

SPC exchange mln paths 2.90 8.41 -20.2

Fax machine thousand pieces 0.26 0.69 56.7

Base station equipment for mobile

communication

mln signal

paths 10.43 30.25 99.1

Mobil phone (GSM CDMA) mln units 94.20 255.50 2.3

Computer mln units 31.03 82.74 22

Microcomputer mln units 26.86 71.53 15.7

Integrate circuit billion units 0.87 2.15 0.7

Colorful TV mln units 10.51 27.36 14.5

Source: NBS

Import and export

Chinese refined tin import was 2,571 in March, down by 30.9% m-o-m, but up by 185.4% y-o-y,

according to the China Customs statistics. The price gap at home and abroad is smaller and smaller since

the year of 2012, and the domestic tin price was a little cheaper than that aboard in March. Although it

was not obvious, the import enthusiasm of domestic businesses could be also hit. And the weak demand

was also one of the reasons for Chinese refined tin import decreasing. In addition, because of the sailing

date and the Chinese New Year holiday, the refined tin import had increased a lot in February. So the

import in March was less than that in February. But it was still at a high record.

The cumulative refined tin import from January to March in 2012 was 7,906t, up by 310.8% y-o-y. The

imports mainly came from Indonesia (1,203t, 46.8%), Malaysia (1,081t, 42.0%) and Bolivia (197t, 7.7%).

In addition, Chinese refined tin export was 622t in March, up by 122.1% y-o-y.

Chinese tin-in-concentrate import was 2,978t (physical quantity) in March, down by 8.7% m-o-m, but

up by 189.1% y-o-y, according to the China Customs statistics. The tin-in-concentrate import was mainly

from Burma (1,775t, 59.6%) and Bolivia (841t, 28.2%) in March. The cumulative tin-in-concentrate

import from January to March in 2012 was 7,522t, down by 16.5% y-o-y.



Chart Sn-3 Chinese import and export of refined tin

Chart Sn-4 Ratio of Chinese tin price against LME cash-month tin price

Outlook

Now the debt auctions in euro zone countries are going well, but in fact the yield is still in a high level.

The market is still worried about the debt default in some euro zone countries. So the European debt

problem will be still the focus in May. HSBC China manufacturing PMI initial value in May announced



at the end of April was below 50%, which showed the manufacturing didn't get better obviously. But it is

expected that the PMI terminal value in May will be better. For USA, as the economic growth was slow

down, the monetary policy will be relaxed further. The QE3 may be announced in June. In general, the

global economy is still unstable, so we will continue to pay close attention to the macro economy. It is

expected that the LME tin price will continue to run with shake in May. The LME 3-month tin in May of

2012 is expected to be running between $20,500 - 23,500/t, and the average price is $22,000/t.

The LME tin price rebounded at the end of April, but the tin price on domestic spot market was stable

as it showed a lack of power for rising because of the weak demand. Now it is staying at 163,500yuan/t.

And most of the smelters reluctant to sell as the raw material price is high. So it is expected tin price will

be stable in short time, but with the changeable economic environment, it could get a risk for declining

further. We forecast the tin price on domestic spot market is 160,500 - 165,500yuan/t in May of 2012,

with an average price of 163,000/t.

Table Sn-4 Chinese Tin Market Balance unit:kt 2009 2010 2011 2012

Production 140.6 150.0 160.0 165.0

Import 20.7 16.0 22.0 18.0

Export 0.7 0.7 1.0 1.5

Crude Tin 12.2 10.0 9.0 10.0

Other Export - 5.0 10.0 -

Apparent Consumption 148.4 150.3 162.0 171.5

Actual Consumption 132.1 148.8 155.0 165.0

Balance 16.3 1.5 7.0 6.5

Source: CNIA, the Customs and Antaike

News in Brief

Policies and Industrial News

Ningxia based lead

smelters and battery

manufacturers forced

to be in clean

production

The environmental protecting department of Ningxia Autonomous Region

determined recently to check the pollution treating performance in lead

smelters, lead acid battery producers, and several other heavy metals related

sectors, according to local media. Then, the department will promote clean

production in those operations in force. Those failed to fulfill the clean

production will be showed in public, and will be punished.

9 Pb-Zn-Au exploring

licenses released in

Chifeng of Inner

Mongolia

There were 9 prospecting projects recently successfully got the licenses of

exploration in Aohan Banner, Chifeng City, Inner Mongolia, sources from

the Land and Resources Bureau of Aohan said. Those projects include 5

exploring licenses for lead and zinc poly-metals deposits and 4 gold deposits.

The total exploration area covers 80.17 square kilometers.

Xi'an to regulate

illegal galvanizing

operations

The Environmental Protection Bureau of Xi'an City announced recently

that it started up a 3-month heavy metal pollution examination movement

since April, according to Xi'an Daily. During the movement, a batch of small

size and illegal galvanizing enterprises will be eliminated.



Hebei to set daily

supervising

mechanism over

dangerous waste

treating processes

Hebei govt. plans to take all-time supervision over the provincial heavy

metal related industries this year, sources close to the situation said. The

purpose is to prevent heavy metal pollution, and to punish the illegal

emission of polluting materials. The targets include nonferrous metals miners

and smelters, galvanizers, battery fabricators and some nonmetal sectors.

The daily supervising system will be formed before May 31th, which will

cover thousands key heavy metal related enterprises. Last year, the provincial

govt. checked nearly 60 thousand companies, and closed 431 and ordered

200s to be in suspension. The examination focused on the lead acid batteries

at that time, and 16 lead acid battery operations were closed, while 93

operations were suspended. Only 12 operations were in normal production.

Miners & Smelters

Chihong fails to fulfill

production plan for

2011

Yunnan Chihong Zinc & Germanium Co., Ltd. (Chihong, Shanghai,

600497) released its financial report for 2011 recently. According to the

report, Chihong produced 253.3kt of lead and zinc in 2011, including 112.1kt

of refined zinc, 44kt of zinc alloys and 97.2kt of refined lead. Chihong

planned to produce 300kt of lead and zinc in 2011 based on its production

plan mentioned in the previous annual report a year ago. So, the company

completed only 84.43% of the plan last year. It announced that the key reason

of the failure in production was the close of its 55ktpy zinc refinery in Huize

county of Yunnan Province.

To meet the requirement of the nation's backward capacity eliminating and

heavy metals pollution preventing plan, Chihong closed Huize Zhehai zinc

refinery after Jun. 30, 2011. Meanwhile, the construction was not finished in

160ktpy lead and zinc smelting project in Huize and the 200ktpy lead and

zinc project in Hulunber of Inner Mongolia. The two projects are still under

construction at present.

A 60ktpy lead

smelting project

commissioned in

Ningyuan of Hunan

Yongzhou Fujia Nonferrous Metals Co., Ltd. held a ceremony for the

commission of its lead smelting project in Ningyuan County of Hunan

Province on Apr. 7, 2012. The project is designed to have capacity of 60ktpy

lead. The smelter adopts rich oxygen bottom blowing smelting technology. It

is said that the operation could produce at most 80kt of lead and lead series

products, 80 kt of sulfuric acid, 300kg of gold, 180t of silver, 300t of

bismuth, 1,100t of copper matte and 9kt of zinc hypoxide each year.

Yuyuan Company

starts a

tech-upgrading

project over its

60ktpy lead smelter

Golmud Yuyuan Nonferrous Metals Co., Ltd. started up a technology

upgrading project over its 60ktpy lead smelting system on April, 6th in

Golmud City of Qinghai Province. The company expresses the new

technology will adopt oxygen bottom blowing furnace, oxygen side blowing

reduction furnace and fuming furnace. When the project is completed, the

new smelting system will save 54% of old system's comprehensive energy

consumption. The new system will also save 14,450t of coal equivalent, and

reduce 247.5t of SO2 discharge each year. The total budget of the project is



RMB 315 mln. The construction term would be one year. So far, the

preparation has been finished basically.

Hechi Nanfang Co.,

Ltd. fully resumes

production

Hechi Nanfang Co., Ltd. announces currently that it has fully resumed

production. The company's lead and zinc operations in Hechi City were

ordered to be in suspension in the turn of Jan.-Feb. this year affected by the

pollution incident nearby.

The pollution incident broke out in Longjiang River of Hechi City.

Affected by the accident, the lead and antimony smelter and zinc smelter of

Hechi Nanfang Co., Ltd. were forced to suspend production in Jan. 18 and

Feb. 5, respectively. In the following two months, the company maintained

and completed the pollution treating facilities. Meanwhile, the related

departments established a special working group to examine the regulating

result of the local heavy metals operations on Mar. 7-8 including that of the

company's. During the examination, the environmental protecting

performance of the company was appreciated. Then, the facilities of Hechi

Nanfang Co., Ltd. restarted gradually after Mar. 15. After Apr. 1, all the

operations of the company returned to normal production.

Hechi Nanfang Co., Ltd. is one of Chinese key refined zinc producers in

China with capacity of 200ktpy zinc, 50ktpy lead and 30ktpy antimony.

Western Mining's

profit down by 91%

in Q1, 2012

Western Mining Co., Ltd. (Shanghai, 601168) published its financial

report for Q1, 2012 on April 18th. Based on the report, Western Mining

created RMB 4.248 bln of sales revenue in Jan.-Mar., 2012, up by 14.16%

y-o-y. However, the net profit declined by 91.13% in the same period to

RMB RMB 21.25 mln.

The company indicated three key reasons for the decline of profit in the

report:

Firstly, the prices of the company's key products decreased a lot in the first

3 months against the same period of the previous year. Western Mining

calculated the refined copper price decreased by 18% in Q1 this year

compared with that a year ago, similar, refined zinc price down by 17%,

refined lead down by 10%, aluminum down by 4%, copper conc. down by

18%, zinc conc. down by 16%, lead conc. down by 11%. The company

predicts those materials' prices would be hard to show a rapid rebound in Q2

unless strong supporting factors appear.

Secondly, the company's key mineral products output should be lower in

the first 3 months this year against the same term of last year because the

production plan of those products is lower for 2012 than that in 2011,

respectively.

Thirdly, the TC of key refined products decreased a lot in Q1 this year on a

yearly basis affected by the downtrend metal prices. In that case, the profit in

smelting process is extruded out more or less. The situation would not change

too much in the second quarter, the company predicted.



According to those thought, Western Mining forecasts in the report that its

net profit would decline by 50% in the first half of 2012.

Huludao Zinc suffers

RMB 113 mln of lost

in Q1, 2012

Huludao Zinc Industry Co., Ltd. (Shenzhen, 000751) released its annual

financial report for 2011 on Apr. 25th. According to the report, the company

lost RMB 1.085 bln last year, compared with RMB 583 mln in 2010. The

EPS for 2011 was RMB -0.98, while that in 2010 was RMB -0.53. In the first

quarter of this year, the company still saw deficit on account.

Huludao Zinc realized RMB 6.899 bln of sales revenue in 2011, down by

11.87% on a yearly basis. The company points out in the report that the

domestic lead and zinc smelters were widely fell into uneconomic operation

on the soft zinc market demands and prices as well as under the continuous

weakened economy and the extension of debt crisis in Europe.

During the whole 2011, Huludao Zinc produced 330kt of zinc, down by

12.1% on a yearly basis; the lead output was 15.8kt, down by 2.73%; the

sulfuric acid output was 510 kt, down by 8.49%; the silver output was 38.6 t,

up by 60.64%; the indium output was 20.7 t, down by 9.1%.

The company was still in deficit in the first quarter this year, according to

the report for Q1, 2012 at the same time. It lost RMB 113 mln in operation in

the period, more than RMB 48.48 mln in the same term of the previous year.

Meanwhile, the income declined by 38.35% y-o-y to RMB 1.288 bln in the

first quarter due to the decline of sales quantity and prices. In the period, the

EPS was -0.1, while that was -0.04 a year ago.

Luoping Zinc

Company regains

profit in Q1, 2012

Yunnan Luoping Zinc & Electricity Co., Ltd. (Shenzhen, 002114) released

its financial report for Q1, 2012, which shows that the company realized

profit in the period again after continuous deficit in 2010 and 2011.

Yunnan Luoping Zinc & Electricity Co., Ltd. created RMB 268 mln of

sales revenue in Q1 this year, up by 2.25% on a yearly basis. Meanwhile, the

net profit was RMB 3.3 mln, compared with RMB 82.37 mln of lost in the

same period of the previous year. The company announces the key reason for

the profit growth was the stocks at the beginning of this year, which's charge

decline was accrued in the previous term and sold in this term. Besides, the

zinc prices increased, while the sales cost decreased against that at the

beginning of this year.

Yunnan Changyi

Mining Co., Ltd.

starts up a 1.5ktpd

Pb-Zn concentrating

project

Sources from Yunnan said that the govt. of Dongchuan District of

Kunming City of Yunnan Province signed a cooperation agreement with

Yunnan Changyi Mining Co., Ltd. recently. The agreement includes a seed

fertilizer project and a lead and zinc dressing plant, which has capacity of

treating 1.5 kt of lead and zinc ores each day. The company plans to invest a

total of RMB 2 bln into the two projects. It is expected the dressing plant will

create RMB 1.5 bln of gross production value per year.

NFC's zinc

production up in 2011

China Nonferrous Metal Industry's Foreign Engineering and Construction

Co., Ltd. (NFC, Shenzhen, 000758) released its annual financial report for



2011 on Apr. 17th. According to the report, the company created RMB 10

bln of sales revenue in 2011, up by 68.2% on a yearly basis. Meanwhile, the

net profit was RMB 383.6 mln, up by 619.8% against the previous year.

NFC is a nonferrous metal equipment designer and manufacturer as well as

a miners and smelter. The company holds lead and zinc mines in Inner

Mongolia, which produced 77.2kt of zinc in conc. and 6.5kt of lead in conc.

in 2011, the total output decreased by 6% against the same period of the

previous year. Meanwhile, the company's smelting operation in Inner

Mongolia too, yielded 161.8kt of refined zinc and alloys, up by 50% on a

yearly basis.

MIN Resources’ zinc

concentrate

production stood at

160,000 tonnes in the

first quarter

MIN Resources announced that its zinc concentrate production stood at

163 kt in the first quarter this year, which has an annual growth of 8% and a

quarterly fall of 4%; the refined copper production is 22 kt, which grows 21%

annually and 7% quarterly; gold production is 34,000 ounces, which grows

62% annually and 64% quarterly; lead concentrate production is 11 kt, which

grows 5% annually, and falls 18% quarterly.

CPM obtains a

Pb-Zn-Ag Polymetal

Mining equity in

Yunnan

Chian Polymetallic Mining Limited (CPM, 02133. HK) announced

recently that it contributed RMB 145 mln for 90% equity of Lead, Zinc and

Silver Mine in Dehong Prefecture of Yunnan Province indirectly.

The mine plans to come on stream in the fourth quarter of 2012. After the

equity transaction, CPM will raise the mine's capacity to mine 600tpd of ores

from previous designed 500tpd and to concentrate 600tpd of ores from

initially designed 100tpd. Besides, the company also plans to inject extra

RMB 71 mln into exploration activities.

Another middle-scale

Pb-Zn deposit is

found in Arhada

With fully supports from local governments, Shandong Gold Group insists

increasing the input of geological exploration in Xilin Gole Area in Inner

Mongolia. The latest source said a middle-scale Pb-Zn deposit has been

found in Arhada Mine Area.

Since 2010, Ximeng Mountain Gold Arhada has an accumulative

investment of over RMB 30 million in the mining and exploring area,

including 38912m/ 93 hole of drilling engineering, 6000 m of trenching

engineering, and 11.37 million tonnes of Pb-Zn ore. Reserves: Lead 264,300

tonnes, zinc 369,500 tonnes, and silver 753.35 tonnes. Average grade: Lead

2.32%, Zinc 3.25%, Silver 64.8 g/t. At present, this area has submitted the

prospecting report and has been reviewed by the Miners Union on March 6,

2012.

This deposit will ensure the resource supply for the development and

expansion of Shandong Gold Stannic Alliance Base.

Downstream News

A battery recycling

project commissioned

in Shanxi

Shanxi Jitianli Technology Co., Ltd. recently commissioned a lead acid

battery recycling and producing project in Yangquan City of Shanxi

Province, sources close to the situation said. The project is now under trial



operation. It has capacity of handling 200kt of used lead acid battery and

producing 4.8 mln kvah each year. The company boasts the project will

become the first production line with whole production chain of lead acid

battery including recycling and producing. The company expects to expend

its capacity to treat 2.46Mt of used resources when its third stage project

comes on stream.

Shanxi sets backward

capacity elimination

target concerning lead

& battery operations

Shanxi Govt. plans to eliminate a batch of backward industrial operations

in 2012, sources from the provincial Commission of Economy and

Information technology. The removal plan concerns 557 thousand kwpy of

power generation capacity, 550ktpy of iron, 23Mtpy of cement, 90ktpy of

ferroalloys, 20ktpy lead, 70 thousand kvahpy of lead acid battery.

Ningxia Huaxia

Power's 2.5 million

battery project

commissioned

Ningxia Huaxia Power Co., Ltd. (Huaxia Power) has completed

construction and installation of its lead acid battery project, which is capable

of producing 2.5 million batteries. One of the three production lines has been

put into production officially.

This total investment in the project is 42 million yuan. When the three

production lines are commissioned, the company can produce 8,000 batteries

per day.and it can satisfy the local demand from Northwest China.

Huaxia Power is a joint venture company by Ningxia Tianbao Group,

Zhejiang China Group and Ningxia Yuanheng Industry and Trade Co., Ltd. it

is a professional high-capacity, maintenance-free lead-acid battery plates and

battery R&D and Manufacturing Company. The Company attaches great

importance to environmental protection work and it is the largest production

base of batteries and battery plates in Northwest China.

Domestic small lead

acid battery

manufacturers to be

widely merged or

eliminated

Last year, Chinese lead acid battery manufacture experienced a wide and

long term environmental protecting regulation that made a batch of

operations within the industry closed or in suspension. Such regulation would

be more strict this year. The Ministry of Environmental Protection announced

to check the lead acid battery industry for three times at the end of the

second, third and fourth quarter. In that case, there would be more small sized

lead acid battery producers merged or eliminated this year.



Statistics Chinese lead, zinc and tin output in Mar. 2012, tonne

Mar. 2012 Jan.- Mar. 2012 Jan.-Mar. chn yoy (%)

Refined Lead 329,298 896,467 0.81

Secondary lead 78,550 209,816 3.17

Lead-in-concentrate 265,584 610,145 35.04

Zinc 405,708 1,182,884 -3.69

Zinc-in-concentrate 442,724 1,014,484 20.23

Tin 13,626 35,629 0.64

Tin-in-concentrate 10,013 22,431 -1.83

Note: 1. All the figures listed above are quoted from the data of China Nonferrous Metal Industry Association (CNIA);

2. Metallic figures include priApry and secondary production.

Chinese Lead in Concentrate Output by Region in Mar. 2012, tonne

Province Mar. 2012 Jan.- Mar. 2012 Jan.- Mar. chn yoy (%)

National total 265,584 610,145 35.04

Hunan 45,300 146,171 47.13

Inner Mongolia 79,725 126,336 19.72

Sichuan 43,972 120,184 74.84

Guangxi 30,068 60,087 42.96

Fujian 12,969 30,061 50.98

Yunnan 10,924 25,157 69.38

Jiangxi 6,756 15,837 6.62

Henan 5,935 13,881 2.47

Guangdong 2,672 13,281 -30.73

Shaanxi 4,573 12,611 41.94

Note: All the figures listed above are quoted from the data of China Nonferrous Metal Industry Association (CNIA); “—“ means unavailable.

Chinese Refined Lead Output by Region in Mar. 2012, tonne


National total 329,298 896,467 0.81

Henan 120,537 342,096 8.37

Hunan 86,636 221,091 13.55

Yunnan 33,237 83,937 8.33

Hubei 31,846 82,946 49.66

Jiangsu 14,453 39,405 -13.92

Inner Mongolia 10,912 22,420 -27.51




Jiangxi 6,392 20,537 -32.25

Anhui 7,377 16,919 -12.65

Fujian 2,935 11,501 7.47

Guangxi 553 10,303 -73.8

Note: 1.All the figures listed above are quoted from the data of China Nonferrous Metal Industry Association (CNIA); "--" means unavailable. 2. Metallic figures include priApry and secondary production.

Chinese Zinc in Concentrate Output by Region in Mar. 2012, tonne


National total 442,724 1,014,484 20.23

Inner Mongolia 130,641 216,292 51.1

Sichuan 53,834 132,876 38.82

Yunnan 46,216 125,242 25.68

Hunan 47,760 120,763 -21.08

Fujian 38,749 94,723 36.35

Guangxi 38,478 91,332 41.17

Shaanxi 26,058 65,035 32.37

Gansu 23,957 58,098 16.91

Guangdong 5,691 26,834 -14.19

Jiangxi 4,748 19,686 69.58

Note: 1.All the figures listed above are quoted from the data of China Nonferrous Metal Industry Association (CNIA); "--" means unavailable.

Chinese Zinc Output by Region in Mar. 2012, tonne


National total 405,708 1,182,884 -3.69

Hunan 92,837 256,072 -0.13

Shaanxi 67,846 175,342 7.27

Yunnan 64,833 168,138 -13.27

Inner Mongolia 31,292 101,763 -8.74

Liaoning 27,600 80,769 -14.31

Sichuan 14,320 79,057 -8.85

Gansu 33,799 77,708 41.6

Guangxi 15,595 72,710 -30.62

Henan 22,995 67,097 2.07

Guangdong 5,085 24,015 -18.26




Chinese Tin in Concentrate Output by Region in Mar. 2012, tonne


National total 10,013 22,431 -1.83

Hunan 5,854 10,992 4.59

Yunnan 1,887 6,918 -9.51

Guangxi 1,200 2,259 -25.57

Jiangxi 378 1,034 30.72

Fujian 230 630 19.32

Inner Mongolia 418 530 91.34

Guangdong 46 68 9.68

Note: All the figures listed above are quoted from the data of China Nonferrous Metal Industry Association (CNIA); "--" means unavailable.

Chinese Refined Tin Output by Region in Mar. 2012, tonne


National total 13,626 35,629 0.64

Yunnan 7,097 19,066 -4.77

Hunan 2,731 6,425 18.39

Guangxi 1,758 5,095 -22.24

Jiangxi 1,234 3,204 73.47

Jiangsu 706 1,520 26.35

Guangdong 49 210 7.69

Zhejiang 11 61 -17.57


Imports and Exports of Lead Products in Mar. 2012

Commodity Quantity in Mar.

2012

Quantity in

Jan.- Mar. 2012

Y-o-Y

Jan.- Mar.

Value in

Mar. 2012

Value in

Jan.- Mar. 2012

Y-o-Y

Jan.- Mar.

Import Tonne Tonne % USD USD %

Lead conc. 147,725 403,598 14.40 286,205 760,783 -4.43

Refined lead 523 1,163 -23.42 1,129 2,417 -26.42

Lead alloys 3,829 11,343 5.34 7,396 22,293 4.98

Lead scraps 0 0 - 0 0 -

Lead semis 42 192 -18.05 954 1,676 -0.63

Others 50 111 -76.27 446 924 -76.85

Export Tonne Tonne % USD USD %

Lead conc. 0 0 - 0 0 -

Refined lead 461 493 -87.34 917 1,002 -89.87

Lead alloys 262 483 -72.84 972 1,514 -72.98




2012

Quantity in

Jan.- Mar. 2012

Y-o-Y

Jan.- Mar.

Value in

Mar. 2012

Value in

Jan.- Mar. 2012

Y-o-Y

Jan.- Mar.

Lead scraps 0 0 - 0 0 -

Lead semis 1,473 4,330 -52.06 3,194 10,134 -57.07

Others 102 372 62.55 558 1,427 70.35

Notes: 1. Figures are provided by the Customs. 2. Imports/exports of concentrates are the physical weight of concentrates.

Sub total

Import

Lead semis

Sheet & strip 22 37 -79.86 630 1,044 22.84

Powder 0 128 478.44 1 67 -19.70

Bar, rod, section, wire 20 27 1.73 323 565 -25.01

Export

Lead semis

Sheet & strip 1,383 4,042 -53.67 3,056 9,382 -58.25

Powder 77 94 1.93 42 47 -50.91

Bar, rod, section, wire 14 193 -9.95 97 705 -32.16

Imports and Exports of Zinc Products in Mar. 2012


2012

Quantity in

Jan- Mar. 2012

Y-o-Y

Jan- Mar.

Value in

Mar. 2012

Value in

Jan- Mar. 2012

Y-o-Y

Jan- Mar.


Zinc conc. 153,206 534,476 -26.73 97,601 361,658 -32.37

Zinc oxides 929 3,797 -25.46 2,456 7,041 -26.07

Refined zinc 45,270 130,987 50.25 94,741 267,089 30.88

Unwrought zinc alloys 11,480 28,312 -15.73 25,951 63,073 -19.21

Zinc scraps 2,798 7,394 -6.44 4,874 12,758 -20.76

Zinc semis 1,575 4,488 -26.83 4,912 14,436 -24.66

Others 199 560 21.07 1,715 4,989 19.11


Zinc conc. 6,310 6,335 - 5,223 5,231 -

Zinc oxides 1,592 3,099 -24.57 2,853 5,579 -23.33

Refined zinc 2,088 2,888 -66.74 4,449 6,265 -69.71

Unwrought zinc alloys 207 325 181.18 465 737 114.21

Zinc scraps 23 23 22,900.00 34 34 7,038.77

Zinc semis 1,154 2,700 -30.86 3,772 9,017 -27.76

Others 2,375 10,348 21.01 7,721 22,257 -8.13

Notes: 1. Figures are provided by the Customs.



2. Imports/exports of concentrates are the physical weight of concentrates.

Sub total

Import

Zinc semis

Powder 483 1,333 -2.04 1,682 4,843 -8.13

Bar, rod, section, wire 920 2,241 -45.76 2,315 5,885 -46.03

Sheet, strip, foil 140 864 42.00 637 3,183 30.99

Tube 12 30 -7.42 231 479 -13.71

Zinc slug for dry cells

(zinc cake) 20 20 - 46 46 -

Export

Zinc semis

Powder 78 167 -38.72 189 477 -49.40

Bar, rod, section, wire 351 615 -5.51 1,216 2,163 -15.37

Sheet, strip, foil 44 157 84.12 131 261 -2.02

Tube 361 1,072 10.38 1,481 4,527 26.81

Zinc slug for dry cells 321 689 -64.21 756 1,588 -69.14

Imports and Exports of Tin Products in Mar. 2012

Commodity Quantity in

Mar. 2012

Quantity in

Jan- Mar. 2012

Y-o-Y

Jan- Mar.

Value in

Mar. 2012

Value in

Jan-Mar. 2012

Y-o-Y

Jan- Mar.


Tin conc. 2,978 7,522 -16.46 14,183 40,782 68.26

Refined tin 2,571 7,906 310.83 58,520 170,402 229.75

Babbitt metal 0 5 1065.89 0 137 1495.24

Solder(Containing by weight

<0.1% of lead) 86 159 8.18 1,678 3,458 12.66

Other Solder 18 52 13.50 549 1,411 -8.09

Other alloys 14 50 -31.69 359 928 -23.71

Tin semis 718 2,112 5.66 20,571 57,936 12.46

Others 54 153 -11.48 2,325 6,060 -26.15


Tin conc. 0 0 - 0 0 -

Refined tin 622 622 122.07 18,024 18,024 175.00

Babbitt metal 0 0 - 0 12 -

Solder(Containing by weight

<0.1% of lead) 0 0 -95.59 0 0 -96.71

Other Solder 0 0 - 0 0 -



Commodity Quantity in

Mar. 2012

Quantity in

Jan- Mar. 2012

Y-o-Y

Jan- Mar.

Value in

Mar. 2012

Value in

Jan-Mar. 2012

Y-o-Y

Jan- Mar.

Other alloys 0 0 - 0 0 -

Tin semis 167 294 -64.08 2,073 3,668 -79.65

Others 20 166 -87.19 246 3,367 -90.24

Notes: 1. Figures are provided by the Customs.

2. Imports/exports of concentrates are the physical weight of concentrates.

Sub total

Import

Tin semis

Bar, rod, section, wire 683 1,922 7.38 19,097 52,042 12.62

Sheet, strip 3 117 -13.81 86 2,536 -17.32

Foil 32 73 -0.12 1,388 3,356 51.20

Tube 0 0 - 0 0 -

Export

Tin semis

Bar, rod, section, wire 54 97 -80.61 1,275 2,285 -83.08

Sheet, strip 0 0 - 0 0 -

Foil 113 197 -38.28 798 1,383 -69.42

Tube 0 0 - 0 0 -

Monthly Prices of Lead, Zinc and Tin on SHFE and Major Spot Market, RMB/t Metals January, 2012 February, 2012 March, 2012 April, 2012

SHFE

Zinc

3-month 15,354 15,978 15,514 15,323

Cash month 15,042 15,711 15,545 15,304

Inventory (tonne) 369,698 383,127 376,711 358,489

Lead

3-month 15,589 15,998 15,815 15,671

Cash month 15,479 15,889 15,744 15,706

Inventory (tonne) 29,962 37,181 26,880 26,013

Shanghai Changjiang Spot Market (Quotation)

Lead Electrolytic 15,482 15,830 15,743 15,663

Zinc SHG 15,026 15,666 15,554 15,691

Zinc HG 14,976 15,616 15,504 15,407

Tin HG 168,700 176,452 170,783 165,676

Notes: Figures are quoted from www.metalchina.com.

Documents

The Most Essential and Authoritative Source for Chinese Metals … · miners and smelters were forced to suspend operation in Hechi. During the regulation, there were a total of 150