Australia's Pasminco Ltd, a big supplier of lead to Asia, has had to buy 10,000 tonnes of lead from Korea Zinc Co Ltd due to a shortfall in production from its Port Pirie smelter in South Australia caused by upgrading work, the dealers said.

The smelter is operating at only about 70 per cent of its capacity of 220,000 tonnes per annum while work to lift production levels to 250,000 tonnes continues.

The lead bought from Korea Zinc was needed to meet its existing commitments through to the end of 1998.

Pasminco has said it expected to complete the upgrade by the end of 1998.

"Until then, lead supplies will continue to remain tight," said a dealer in Sydney.

A spokeswoman for Pasminco declined to comment on the lead purchases but said that supply and demand for lead in Asia appeared balanced at the moment.

"We also see thesupplies of lead in the European market as very tight due to the reduced production from our Port Pirie smelter," the spokeswoman said.

Premiums for lead over the London Metal Exchange average monthly price are running as high as US$80 a tonne, ex Singapore, dealers said.

Premiums were about $10 a tonne lower in mid-September, they said.

"The flip side will come next year when Pasminco's additional output kicks in," said Rob McCurdy, managing director of the Asia-Pacific region for Cominco Metals Pte Ltd, a global metals producer and trader.

McCurdy said Cominco had met the company's target of selling around 13,000 tonnes of lead into the Asian market this year.

Sales of between 60,000 and 70,000 tonnes of zinc in Asia were also in line with the company's expectations for the year, although shipments to countries hardest hit by the economic malaise, particularly Indonesia and Thailand, had declined dramatically, McCurdy added.

Globally, lead prices have come under near-relentless downward pressurein 1998 and are currently about $500 a tonne ($0.227/lb) on the LME, well below 1997's average of $624 a tonne ($0.283 /lb).

"Because the price is so low, buyers don'T mind giving up a bit on the premium side," said metals analyst Rob Nachum of Minalysis in Sydney.