As Secondary Lead Smelters Increased Production Cuts Amid Losses, August Production Declined Significantly [SMM Data]

In August 2024, secondary lead production was 297,200 mt, down 3.6% MoM and 28.71% YoY. From January to August 2024, cumulative secondary lead production was 2.5406 million mt, down 12.58% YoY. In August 2024, secondary refined lead production was 244,000 mt, down 4.2% MoM and 32% YoY. From January to August 2024, cumulative secondary refined lead production was 2.1437 million mt, down 15.17% YoY.

In August, the lead-acid battery market did not show significant improvement in consumption, and downstream battery producers only maintained raw material procurement to meet just-in-time needs. Additionally, due to the impact of high temperatures, most factories took high-temperature holidays, leading to a decline in operating rates. Therefore, lead ingot inventories were slowly digested. Meanwhile, overseas lead ingots pre-ordered around the end of July began arriving, and their volume and price advantages suppressed domestic lead ingots. Domestic secondary lead smelters reported difficulties in transactions, with high inventories of lead ingots in factories. To turn over funds, they quoted tax-included, ex-factory prices at significant discounts to the SMM 1# lead average price. The weak consumption amid peak season and ample circulating lead ingot supply led to continued weakening of lead prices, and the significant discount was hard to narrow. Secondary lead smelters entered a loss-making phase, increasing production cuts. Therefore, August secondary lead production declined significantly. Entering September, many secondary lead smelters are expected to resume production, mainly in mid to late September. SMM conservatively estimates that September secondary lead production may increase by 10,000 mt to 307,300 mt.