Henan Yuguan has no plan to cut lead output in '07

China's biggest lead producer by output Henan Yuguang Gold and Lead Co. (600531.SH) doesn't have any plan to lower production this year amid high ore prices, having secured ore supplies until at least September, company officials said Monday.

"It is impossible (to cut production,)" an official at the company's securities and investors department said.

"We have (production) goals this year, and we'll meet it – it's about the same as last year's (output)," said the official, who gave his surname as Zhang.

In 2006, the company's lead production rose 25% on year to 287,700 tons, or about 11% of the country's total.

With the introduction of a 10% export duty on refined lead since June 1, the company began to sell some of it exports in the domestic market.

"It's more profitable to sell domestically now, given the export duty," said a company sales manager.

Although exports remain profitable, it takes a longer period of time to realize profits due to more complicated customs procedures, he said.

Three-month London Metal Exchange lead price, which hit an all-time high of $2,560 a metric ton Friday, was about 165% higher than a year ago.

China's domestic lead prices were quoted around CNY18,000/ton Monday.

Meanwhile, Chinese smelters began to reduce ore orders, as high three-month LME lead prices and the shortage of ores will surely cap the country's total lead output growth this year, analysts said.

"With three-month LME lead heading towards $3,000/ton, smelters will be under rising pressure due to the scarcity of ores," said Feng Juncong, an analyst with metals research firm Antaike Information Development Co.

It's impossible for domestic output to rise as much last year, as the output in major production regions such as Henan, Anhui, Hunan provinces have been falling because some small smelters were closed by the government for environmental reasons, Feng said.

Data provided by China's National Bureau of Statistics showed that lead output in January-May rose 6.7% on year to 1.09 million tons.

＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊
DONGGUAN JIEFU FLAME-RETARDED MATERIALS CO.,LTD
Sam Xu
Tel: 86-755-83474911
Fax: 86-755-83474980
Mobile:13929211059

E-mail: xubiao_1996(at)hotmail.com samjiefu(at)gmail.com
Add: jiefu industrial park shuiping industrail district dalang town dongguan GD,P.R.C
blog:http://antimony-trioxide.blogspot.com
website:http://www.jiefu.com