Smelters Resume Production in Concentration: How Much Will Primary Lead Production Increase in July? [SMM Analysis]

         SMM reported on June 30: National primary lead production in June 2025 declined as expected, with a MoM decrease of 0.78 percentage points and a YoY increase of 16.23 percentage points. The cumulative primary lead production from January to June 2025 increased by 9.69 percentage points YoY.

         It is understood that in June, maintenance and production resumptions coexisted among primary lead smelters, with the overall production decline being smaller than anticipated. The main reason for the smaller-than-expected decline in primary lead production this month was that lead prices fluctuated upward, with the most-traded SHFE lead contract gradually stabilizing above the 17,000 yuan/mt level, especially in late June, when SHFE lead surged strongly, reaching a high of 17,270 yuan/mt, the highest in nearly three months. As lead prices rose, the production enthusiasm of lead smelters increased, with some enterprises increasing production or postponing maintenance, resulting in a smaller-than-expected decline in production. During this period, maintenance occurred at lead smelters in north and south-west China, while enterprises in other regions also experienced production reductions due to insufficient supply of raw materials such as lead concentrates and scrap. Meanwhile, smelters in central and south China resumed production after maintenance. Overall, production in June was roughly balanced between increases and decreases.

         Looking ahead to July, the relatively concentrated resumption of production after maintenance at primary lead smelters is expected to bring about a certain degree of production growth. For example, lead smelters in regions such as east, central, and north China, which completed equipment maintenance in June, will all resume normal production in July. Even if new maintenance plans are added at lead smelters in south-west China during this period, it will not affect the expected production growth of primary lead in July due to their small-to-medium-scale production capacities. In addition, it is worth noting that if the upward trend in lead prices continues, it will stimulate the production enthusiasm of smelters, and primary lead production is expected to increase by around 4 percentage points in July.

         Meanwhile, lead concentrate TCs have further declined, with the issue of negative TCs for imported ore being prominent. Some import prices have even fallen to -$80 to (-$100)/dmt. The latest SMM domestic lead concentrate Pb50 TCs have dropped to 400-700 yuan/mt (metal content). Against the backdrop of increased production at lead smelters, the supply gap for raw materials such as lead concentrates will further widen, potentially becoming one of the factors limiting the increase in lead ingot supply in July.