Lead Concentrate Import Window Gradually Closed, Silver Concentrate Imports Performed Well [SMM Analysis]

In Q3 2024, lead concentrate imports turned profitable, and the import window remained open, leading to increased activity in the lead concentrate trade market. Since mid-August, lead concentrate import profits have gradually declined, turning into losses, and the import window has closed. According to customs data, in August 2024, lead concentrate imports reached 117,000 mt in physical content, up 22.79% MoM but down 14.36% YoY. Cumulatively, lead concentrate imports in 2024 totaled 723,800 mt (metal content), with a cumulative YoY decline of 9.19%. Additionally, silver concentrate imports in August were 157,800 mt in physical content, up 27.56% MoM and 41.33% YoY.

By country, Russia, the United States, and Australia were the main sources of lead concentrate imports in August, accounting for 50.8% of the total. Furthermore, lead concentrate imports from South American countries increased slightly compared to previous periods.

According to an SMM survey, domestic lead concentrate procurement is mainly based on long-term contracts. Meanwhile, due to the start-up of overseas lead-zinc projects, the trading volume of a single spot order may be less than 10,000 mt by mid-year. After the import window opened in Q3, a trader told SMM that due to stronger Chinese lead prices and more favorable lead concentrate TC quotes, some lead concentrate originally destined for other Asian countries flowed into China. Unlike other months, the total lead concentrate from South American countries increased in August. A smelter noted that South America has always been an untapped market for lead concentrate import trade, and domestic smelters have been actively seeking more lead-zinc resource suppliers overseas.

Entering September, the SHFE/LME price ratio continued to weaken, and lead concentrate imports turned unprofitable, closing the import window. As the expected arrival of imported lead concentrate, silver concentrate, and other crude lead materialized, the tight domestic lead ore supply eased slightly. The market no longer saw ultra-low Pb60% TC quotes of -100~-50, with a small number of tendered imported Pb60% TC quotes rising to $-30-0/dmt. The opening of the import window could not effectively fill the domestic demand gap for high-grade lead ore. The increase in raw material inventory at smelters and the current round of import replenishment vary, leading to significant differences in quotes.