Tightening supply of both primary and secondary lead is likely to bolster physical lead prices in China, says Zhu Rongrong, an analyst with Shanghai Metals Market.
Low secondary lead prices largely squeezed margins for smelters, leaving even unlicensed smelters unprofitable. This has resulted in massive stoppages in late 2014, especially at those unlicensed companies.
Furthermore, Anhui’s Huaxin Lead Industry Group has shut down smelters in its old factory zone due to a failure to meet environmental protection requirements.