[SMM Analysis: How Much Will Primary Lead Production Increase in July Amid Concentrated Production Resumptions by Smelters?]

SMM June 30 Report: National primary lead production in June 2025 declined as expected, down 0.78% MoM, but up 16.23% YoY. Cumulative primary lead production from January to June 2025 increased by 9.69% 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 the fluctuating upward trend in lead prices, with the most-traded SHFE lead contract gradually stabilizing above the 17,000 yuan/mt threshold, especially in late June when SHFE lead surged strongly, reaching a peak of 17,270 yuan/mt, the highest in nearly three months. Rising lead prices boosted the production enthusiasm of lead smelters, 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, leading to a general balance between production increases and decreases in June.

Looking ahead to July, the relatively concentrated resumption of production by primary lead smelters after maintenance is expected to bring about a certain degree of production growth. For instance, 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 introduced by lead smelters in south-west China during this period, their production capacity scales are small-to-medium-sized enterprises, and thus will not affect the expected production growth of primary lead in July. Additionally, it is worth noting that if the upward trend in lead prices continues, it will stimulate the production enthusiasm of smelters, with primary lead production in July expected to increase by around 4 percentage points.

Meanwhile, lead concentrate TCs have further declined, with the issue of negative TCs for imported ore being prominent. Some import prices have even reached -80 to -100 US dollars/dmt. The latest SMM domestic lead concentrate Pb50 TCs have dropped to 400-700 yuan/mt (metal content). Against the backdrop of increased production by 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.