Lead Concentrate Supply Recovery Falls Short of Expected Primary Lead Production Release in Mar-25; Pb50/Pb60TC More Likely to Fall Than Rise [SMM Analysis]

In Q1 2025, the global supply of lead concentrates recovered slowly, particularly as production in major mining countries failed to meet expected levels. Meanwhile, the resumption of refined lead smelting capacity after technological transformation and maintenance further exacerbated the supply-demand imbalance. In March, the growth in lead concentrate supply lagged behind that of refined lead, and the supply gap for lead concentrates is expected to widen.

On the supply side of lead concentrates, multiple factors imposed constraints. On one hand, stricter environmental protection policies slowed down mining progress at numerous small mines. On the other hand, in newly commissioned lead-zinc projects aimed at expanding capacity, the increase in lead concentrates was far less significant than that of zinc concentrates. Due to the scarcity of new silver-bearing lead ore projects, the strengthening of gold and silver prices led holders of already scarce silver-lead ore resources to offer lower RCs or further reduce Pb50 and Pb60 TC quotes. The insufficient supply of lead concentrates drove up raw material procurement costs for smelters. According to SMM, despite a significant decline in operating rates at domestic smelters in February, raw material inventories at smelters were moderate enough to sustain March production. Therefore, although market quotes for circulating lead concentrate supplies dropped significantly, most smelters with better resources have not yet fully lowered their TC quotes.

In stark contrast to lead concentrate supply, the overall supply of refined lead from primary lead smelters stabilized and recovered in March. Large smelters in Hunan, Yunnan, and Jiangxi completed their production cuts and maintenance from February, with an expected increase of approximately 65,000 mt in metal content on a MoM basis. The mild increase in lead concentrate supply, insufficient replenishment of recycled materials, and the anticipated production increase in primary lead smelting in Q2 make Pb50 and Pb60 TC prices more likely to fall than rise in the short term. Some small-scale smelters have already delayed their shutdown schedules due to tight raw material supply, and further restrictions on raw material supply may limit the release of additional refined lead capacity.

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