Japan Lead-Smelters increasingly dependent on recycling
TOKYO - Japanese smelters are expected to obtain more raw materials to produce refined lead from battery scrap at home, where the recycling system is well-established, industry sources said yesterday.
"Japanese demand for foreign lead concentrates has been declining in the past years and will continue to do so in the long term," said an industry analyst.
Many domestic smelters are not keen to boost processing capacity for foreign lead concentrates also because lead demand for use in solder and chemicals has fallen due to environmental concerns, he said.
Japans reluctance to obtain foreign lead concentrates is likely to be particularly notable this year since local smelters are facing tough treatment charge (TC) talks for with foreign miners for 2001 shipment due to tight global supply, they said.
Smelters that use scrap are not affected by changes in lead prices on the London Metal Exchange (LME) because they receive refining fees from battery makers on a tolling basis, the analyst said.
Japans lead production is forecast to rise to 237,300 tonnes in the year to March 31, from 229,800 tonnes in 1999/00 and 226,900 tonnes in 1998/99, according to latest forecasts released by the Ministry of Economy, Trade and Industry (METI).
Lead production from foreign concentrates is estimated at 109,900 tonnes in 2000/01, down from 116,600 tonnes in 1999/00 and 135,100 tonnes in 1998/99, the METI forecasts showed.
The sources said about 90,000 tonnes of lead is estimated to come from scrap in 2000/01, up from 80,626 tonnes in 1999/00 and 51,011 tonnes in 1998/99.
Battery making accounts for some 70-75 percent of total lead consumption on a global basis, and therefore demand is closely linked to vehicle production.
Growing vehicle production has boosted demand for lead in the past year, although foreign miners had cut their lead concentrate production in line with falling prices.
It usually takes half to one year for miners to raise concentrate production and it is unlikely that foreign miners will boost output unless lead prices recover to more than $600 per tonne, said an official at a domestic smelter.
On Tuesday, three-month lead ended down $9 at $507 per tonne.
Treatment charges (TCs) for lead concentrates are now quoted at $100-$120 a tonne in spot markets, much cheaper than the TCs settled for 2000, a trader said.
"For 2000, the TCs were reportedly settled at about $180-$190, although the base LME price looked varied," he said without giving further details.
REUTERS NEWS SERVICE
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