Lead Falls From Nine-Week High on China Lead Producer Output

By Glenys Sim

July 24 (Bloomberg) -- Lead fell from a nine-week high in Asia, dropping for the first day in five, after the world's largest lead producer said production losses due to seasonal maintenance can be made up and it is not considering output cuts.

China's Henan Yuguang Gold & Lead Co. carried out maintenance for ``a few days'' from July 11, affecting 2,000 to 3,000 metric tons of output, Li Huiling, an investor relations official, said today. The maintenance work is complete and the loss in production can be made up, said Li.

``It was just speculators making the news out to be more than it really was,'' Wang Pengzhen, an analyst at Zhongda Futures in Zhejiang, said today. ``The domestic market is well stocked at the moment and overall output is also up.''

Lead for delivery in three months on the London Metal Exchange fell as much as 2.3 percent to $2,161 a ton, and traded at $2,200 at 3:15 p.m. Singapore time. Earlier the contract gained as much as 1 percent to $2,235 a ton, the highest since May 20.

Henan Yuguang Gold, which has an annual capacity of 300,000 tons, has no plan yet to reduce output after rivals agreed to cuts to bolster prices earlier this month, Li said.

Some lead smelters in China agreed to reduce output by 10 percent for three months through September to bolster prices and ease a power shortage, the Shanghai Nonferrous Metals Trade Association said July 14. China is the world's largest producer and consumer of the metal.

China produced nearly 1.5 million tons of lead in the first half of this year, up 9 percent from the same period last year. The International Lead and Zinc Study Group forecasts there will be a 26,000-ton lead surplus this year.

Among other LME-traded metals, copper fell 0.3 percent to $8,060 a ton, nickel dropped 1.8 percent to $19,600, and tin slipped 1.3 percent to $22,800. Aluminum added 0.3 percent to $3,015 a ton and zinc rose 0.3 percent to $1,930 as of 3:20 p.m. Singapore time.

To contact the reporter for this story: Glenys Sim in Singapore at gsim4@bloomberg.net