China's output of primary lead fell in May

In May 2024, the domestic output of primary lead was 288,800 mt, down 0.93% MoM and down 6.8% YoY. The cumulative output from January to May 2024 was down 4.87% YoY. The total capacity of surveyed enterprises in 2024 was 6.0063 million mt.

The production of large smelting enterprises in Henan resumed. That, together with the recovery of smelting enterprises in Hunan and Yunnan after maintenance, brought an output increase of over 10,000 mt. Meanwhile, smelting enterprises in Yunnan, Hunan, and other regions started maintenance. The lead concentrate TC hit a new low, leading to a decline in crude lead RCs. Raw material supply issues constrained production, also bringing a reduction of over 10,000 mt in output. The output in May was in line with our forecast.

In June, based on the production plans of major enterprises, the output of primary lead is expected to remain relatively stable compared to May. Smelting enterprises in Henan, Anhui, and Inner Mongolia plan to undergo maintenance in early, mid, and late June, respectively, which is expected to affect over 10,000 mt of primary lead output. Meanwhile, smelting enterprises in Yunnan, Hunan, and Henan will resume production after maintenance, and with lead prices showing a strong fluctuation, the production enthusiasm of smelting enterprises is strong. However, due to the limitations of lead concentrate supply, the recovery of these enterprises can only make up for the reduction in output. Overall, SMM expects the output of primary lead in June to remain at 288,000 mt.