The output of secondary lead in January 2024 was 319,100 mt, a decrease of 6.7% from December and an increase of 2.41% year-on-year. The output of secondary refined lead in January 2024 was 271,700 mt, a month-on-month decrease of 8.49% and a year-on-year increase of 1.23%.
In December, air pollution alerts were issued in many regions, and secondary lead smelters reduced and suspended production in compliance with environmental protection controls, resulting in a sharp decline in output. According to SMM survey, in early January 2024, secondary lead smelters in some areas were still affected by environmental issues, and individual secondary lead smelters in Anhui significantly reduced their output. In addition, raw material stockpiling in mid-January by downstream battery manufacturers and secondary lead smelters caused the demand for battery scrap to rise sharply. The price of electric vehicle battery scrap once again exceeded 10,000 yuan. In late January, downstream battery companies were finishing their stocking and are gradually closed for holiday. The lack of consumption dragged down lead prices; secondary lead companies were facing high costs and low finished product prices, and their profit margins narrowed compared with the first half of the year. Some companies said that the loss expanded, affecting production enthusiasm. Therefore, secondary lead smelters once again experienced large-scale shutdowns or maintenance in late January; however, there was a reduction of more than 90,000 mt in December, so the output decline in January was limited.
In February, fewer calendar days and the Chinese New Year holidays will lower the output of secondary lead again. Most companies said that they will decide the specific date for resumption of production based on market conditions. According to SMM survey, companies that suspended production during the Chinese New Year holidays will heat their furnaces at the end of February, and most of them will officially produce production in early March. SMM predicts that the output of secondary refined lead in February may fall by more than 30,000 mt to 241,200 mt.