SHFE/LME Lead Price Ratio Expansion Turns Lead Concentrate Imports Profitable, Import Window Opens? [SMM Analysis]

According to customs data, in April 2024, lead concentrate imports were 90,900 mt in physical content, up 25.15% MoM. But YTD imports through April still recorded a negative YoY growth of 17.74%. Russia remained the main source of lead concentrate imports in April. According to research, lead concentrate imports in April were mainly long-term contracts arriving at ports. The SHFE/LME lead price ratio slightly expanded compared to Q1, narrowing lead concentrate import losses. Entering May, lead concentrate imports gradually turned profitable.

Additionally, rising silver prices boosted smelters' demand for silver-containing imported lead ore. The pricing coefficient for lead ore with silver content above 3 kg saw a slight increase. Such lead ore often has a lead grade lower than the national standard for lead concentrate and is thus often imported as silver concentrate. In April, silver concentrate imports also recorded a MoM increase of over 6%.

Entering May, the SHFE/LME ratio expanded again, and lead concentrate imports turned profitable. According to SMM shipping data, lead concentrate port departures showed an increasing trend, but no increase was observed in arrivals at major domestic ports. Although some market participants expect that lead concentrate imports in May may remain stable or increase slightly. However, according to SMM research, the total supply of overseas lead ore is limited, and domestic smelters expect raw material supply and demand to be tightly balanced, with no rebound expected in lead concentrate TC.