At the beginning of the new year, the lead spot market became active again after the resolution of factors such as year-end closing and inventory checks. Although refined lead supply continued to decline in December 2024 and January, downstream operating rates also pulled back simultaneously. The lead market experienced a dual decline in supply and demand, and the anticipated pre-Chinese New Year downstream inventory buildup has yet to materialize.
In the refined lead market, the main increase in Q4 came from the ramp-up of newly commissioned production lines in Qinghai and the gradual recovery from environmental protection-driven production restrictions in Anhui. However, the refined lead supply from these regions could not offset the localized supply-demand imbalance caused by the unexpected year-end production cuts in the South China market.
In January, according to related traders, spot primary lead in Hunan and Guangdong was quoted at a premium of 200-300 yuan/mt against the SMM 1# lead average price. After lead prices weakened, low-inventory suppliers stood firm on quotes and were reluctant to sell. Although environmental protection-driven production restrictions in Hunan ended, the proximity of the Chinese New Year holiday limited the recovery of primary lead production. Some smelters opted to extend maintenance periods to reduce the typical inventory buildup pressure during the holiday season. Therefore, despite weak fluctuations in lead prices in January, due to factors such as smelter maintenance and tight raw material supply in certain regions, suppliers in Hunan, Yunnan, and Guangdong are expected to maintain high premium quotes before the holiday.
