“There is a strong competition for lead scrap and there are no signs that this is going down so we need to adjust to this environment,” he told delegates at Metal Bulletin’s 7th World Lead conference in Milan, Italy.
The high price of scrap over the past few years has been putting pressure on margins for secondary lead smelters, with very few smelters making any profits.
But despite this, it is not likely that these secondary smelters will close, Fyhr said.
“It is extremely expensive to shut down secondary smelters. Closing and cleaning up the area is more expensive than running operations at small losses. So this situation is likely to continue for many years,” Fyhr said.
This means that lead smelters need to find ways to adapt to this environment, he said.
“Smelters need to adapt to become more efficient and find new revenue streams. This could include recycling plastic boxes or converting excess energy to electricity,” he said.
One factor that could encourage some secondary smelters to close are the changes in legalisation that are to be implemented in the near future.
“These legislations will likely require significant investments for smelters and there is a question-mark over whether all smelters will be able to keep up with those investments when they have been running at losses and don’t have financially strong owners,” Fyhr said.
But although this could push some smelters to close, he said, secondary producers still need to prepare for more difficult years ahead.
“At Boliden we are becoming more efficient. We have reduced all types of waste, which will have a positive effect moving forward,” he added.
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