Lead Concentrate Import Window Opened: Why Did June Lead Concentrate Imports Decreased MoM? [SMM Analysis]

Since May, lead concentrate imports have started to turn profitable, with the import window initially opening but remaining unstable. In June and July, lead concentrate import profits expanded, and the import window stabilized. Despite June lead concentrate imports reaching 93,000 mt, up 13.28% YoY, they still fell short of 100,000 mt, down 7.12% MoM from May. The main sources of lead concentrate imports in June were Russia, Myanmar, and Turkey.

According to an SMM survey, current lead concentrate imports are mainly under long-term orders arriving at ports. Some smelters actively picked up goods at spot pricing or requested early delivery of long-term orders amid the widening price ratio. A trader indicated that actual lead concentrate TC quotes fluctuated downward as import profits expanded. The TC for high-quality imported lead concentrate has dropped to -$50 to -$100/dmt, meaning that the lead metal in imported lead concentrate has long been purchased at a premium to LME prices. Actual import profits for lead concentrate were not as high as theoretical estimates. Additionally, with overseas lead smelters resuming production, lead concentrate remained a scarce resource, and market circulation was limited. The opening of the lead concentrate import window could not effectively fill the domestic lead concentrate supply gap.

In July, the lead import window remained open, and lead concentrate import profits continued to expand, but market circulating supply remained tight. Apart from some smelters' raw material inventories slightly increasing after the concentrated arrival of long-term orders, most smelters' days of raw material inventories remained at a low level of around 20 days. According to shipping data, the port-tradable spot lead concentrate is expected to see an increase in July. However, market quotes for pb60TC showed varying degrees of decline due to the continued expansion of the SHFE/LME price ratio at the end of the month. With domestic smelters resuming maintenance, the domestic lead concentrate market supply and demand may remain tightly balanced.