Zinc and lead smelting sectors cause concern
The National Development and Reform Commission, Beijing's top planning agency, yesterday said it was concerned about 'excessively rapid' growth in investment in the country's zinc and lead smelting industries, sparking expectation of further tightening measures soon.
Investment in zinc and lead smelters jumped 58 per cent year on year to 7.95 billion yuan in the first nine months, against the 39.4 per cent rise to 110.2 billion yuan in the entire non-ferrous metal sector, the commission said on its website.
Profit at 16 key zinc and lead smelters surged 36.3 per cent to 8.37 billion yuan in the first nine months this year, the commission added.
More investment in zinc and lead smelters defied Beijing's measures this year, including a building ban on small lead and zinc projects.
Dong Liyong, chief executive at zinc and lead mining company Yue Da Holdings, said the robust growth was fuelled by the rising price of the metals in the past few years.
However, the growth pace was unlikely to be sustainable because ore supply was inadequate and excessive capacity would put pressure on metal prices which in turn would erode smelters' profitability.
In the first 10 months this year, China, the world's top producer and consumer of zinc and lead, produced 19.1 per cent more zinc to 3.03 million tonnes and 2.19 million tonnes of lead, up 5.4 per cent, according to commission data. Zinc is commonly used for galvanising steel while lead is a key mineral in battery production.
The commission is considering new tax rates to curb exports of both metals, according to reports. It may also lift the export tax on lead to 15 per cent from 10 per cent, they said.