SMM China July Secondary Lead Production and August Forecast

In July 2024, secondary lead production was 308,300 mt, down 7.03% MoM and 17.94% YoY. From January to July 2024, the total production was 2.2434 million mt, down 9.88% YoY. In July 2024, secondary refined lead production was 254,700 mt, down 7.69% MoM and 24.02% YoY. From January to July 2024, cumulative secondary refined lead production was 1.8997 million mt, down 12.38% YoY.

In July, the retirement volume of battery scrap did not show significant improvement. By the end of July, the tax-included price of battery scrap jumped significantly, reaching a high of around 12,200 yuan/mt. Battery scrap traders were bullish and reluctant to sell. Secondary lead smelters showed an increased willingness to suspend production due to high raw material costs and poor arrivals. Additionally, with the implementation of the Fair Competition Review Regulations starting August 1, secondary lead smelters anticipated the cancellation of preferential tax rebate policies by local governments, leading to a strong sentiment of production suspension and wait-and-see. July production declined significantly. Entering August, some smelters suspended production due to policy uncertainties and a low market sentiment amid declining lead prices. However, smelters that previously halted production due to equipment failures, maintenance, or license renewals gradually resumed production. Overall, SMM expects secondary refined lead production in August to increase by 14,700 mt to 269,500 mt.