China refined lead output in August

In August 2023, the domestic output of refined lead was 318,900 mt, a drop of 0.27% month-on-month but up 18.83% year-on-year. The cumulative output from January to August 2023 increased by 17.78% year-on-year. Total production capacities of enterprises in the survey totalled 5.84 million mt in 2023.

Major large-scale smelters in Henan Province were overhauled in August, resulting in significant output reductions. Meanwhile, smelters in Anhui, Yunnan, Hunan and other regions resumed their operations after maintenance, and high lead prices incentivised smelters to step up production in August even as lead concentrate TCs dropped. Therefore, the output growth largely offset the output reduction.

Output in September will change little in view of maintenance and output recoveries at refined lead smelters. The completion of maintenance of large-scale refined lead smelters in Henan will contribute most of the output increase. In addition, lead prices continued to be strong, and the price difference between futures and spot goods expanded, standing at a maximum of over 700 yuan/mt as of September 7. This drove smelters of deliverable lead brands to make deliveries to warehouses and lift production. On the other hand, the refined lead smelters in Inner Mongolia, mostly large-scale enterprises, plan to undertake maintenance. Their reduction in production has offset most of the expected output increase. Meanwhile, smelters normally restock lead concentrate inventories for winter production from September to October, which will tighten the supply and lower lead concentrate TCs. This will limit the output growth of smelters. China's refined lead output is estimated to increase to around 322,000 mt in September.