[SMM Analysis: Primary Lead Production Declined in July Instead of Rising; Will Production Recover as Scheduled in August?]

SMM reported on July 31, 2025: National primary lead production in July 2025 declined rather than increased, with a 1.04 percentage point decrease MoM and a 5.43percentage point increase YoY. The cumulative primary lead production from January to July 2025 increased by 9.05 percentage points YoY.
It is understood that in July, unexpected maintenance occurred at primary lead smelters in central China, with relatively large capacity scales, dragging down the primary lead production in that month below expectations and resulting in a MoM decrease. The main reasons are as follows: On the one hand, the supply of lead concentrates is tight, with processing fees (TC) falling for two consecutive months. The latest SMM import ore pb60 monthly TC was reported at -$70~(-$50)/dmt, dropping for two consecutive months, and transaction prices as low as -$150~(-$100)/dmt even emerged in the market. On the other hand, in mid-to-late July, the center of primary lead prices shifted downward, reducing the production enthusiasm of primary lead smelters. Some enterprises chose to actively reduce production or slow down the recovery progress after maintenance amid tight raw material supply, resulting in a negative MoM growth in production for that month.
Looking ahead to August, primary lead smelters will gradually resume production after completing maintenance, including medium-to-large enterprises in central, southwest, east, and north China. Meanwhile, the new capacity of large enterprises in central China is about to come online, potentially bringing additional incremental space. Even though primary lead smelters in north and northeast China will enter routine maintenance, it will not change the upward trend in primary lead production in August. In addition, during the process of production resumption or new capacity commissioning by primary lead enterprises, the raw material supply gap may widen again. Coupled with the weakening of primary lead prices at month-end, this has dampened the production enthusiasm of some enterprises. SMM conservatively estimates that primary lead production in July will increase by about 4.5 percentage points MoM.

Data Source Statement: Except for publicly available information, other data are based on publicly available information, market exchanges, and SMM's internal database models, processed by SMM for reference only and do not constitute decision-making advice.