Recovery After Maintenance as Main Focus, Primary Lead Production in May May Fully Recover from Decline [SMM Analysis]

         SMM News on April 30: In April 2025, the national primary lead production turned downward, declining by 3.95 percentage points MoM and increasing by 9.75 percentage points YoY. The cumulative primary lead production from January to April 2025 rose by 6.55 percentage points YoY.

         It is understood that in April, large enterprises in Henan province conducted equipment maintenance as planned, which was one of the main factors contributing to the decline in primary lead production this month. Meanwhile, lead prices fell sharply in April compared to March. The most-traded SHFE lead contract dropped from a peak of 17,805 yuan/mt in late March to a low of 16,165 yuan/mt in early April. The decline in lead prices exceeded 1,500 yuan/mt, dampening the production enthusiasm of lead smelters. Lead smelters in Yunnan, Jiangxi, and other regions voluntarily cut production or announced new maintenance plans. During this period, although some smelters in Yunnan and Hunan provinces resumed production after maintenance, their relatively small capacity scales or limited production increases did not reverse the downward trend in primary lead production this month.

         In May, the relatively concentrated resumption of production by lead smelters after maintenance will offset the production decline in the previous month. Large enterprises, represented by those in Henan, will resume production, and smelters in Yunnan, Hunan, and other regions will continue to ramp up production after resuming in April. In addition, lead smelters in southwest and east China plan to conduct routine maintenance, but the impact on May's production will be limited. Overall, the primary lead production in May is expected to increase by over 10,000 mt MoM.

         Furthermore, since April, the issue of the US tariff hike has intensified. According to customs data, approximately 10% of China's lead concentrate imports in 2024 originated from the US. After the tariff hike this year, the supply of lead concentrates from the US has significantly decreased, exacerbating the tight supply of domestic raw materials. While lead smelters are increasing their production schedules, we need to be vigilant about the impact of raw material supply issues on lead ingot production. If the supply of raw materials becomes further tightened, there is a possibility that the increase in primary lead production may fall short of expectations.