Will refined lead supply decline again near year-end? Primary lead smelter maintenance expected in December [SMM Analysis]

With Q4 already halfway through, primary lead smelters' year-end maintenance plans are gradually being released. Although primary lead smelter production has not yet been affected by smog weather, there are still significant reductions expected in December. SMM preliminary survey is as follows.

Aside from technical upgrades and routine year-end maintenance, there are two main situations where production is reduced compared to normal operations. The first situation is due to tight supply of silver-bearing crude lead in certain regions, leading to an inability to achieve full production of primary lead. However, these smelters also mentioned that if raw material supply improves, the reduction impact could be eliminated. The second situation involves lead smelters prioritizing high-grade ores. Although production is at full capacity, the grade of lead metal has declined while the grades of silver and other metals have increased, resulting in a marginal decline in primary lead production. However, this reduction did not start in December, so although there will be no MoM reduction, the cumulative production in Q4 will decline compared to Q3. In the spot market, as the end of November approaches, smelters are concluding their November long-term contract settlements and starting December long-term contract sales. In December, smelters in Hunan and Guangdong are reducing their long-term contract supply due to expected maintenance.