SMM analysis on China June secondary lead production and July forecast

In June 2024, China's secondary lead production was 331,600 mt, up 3.43% MoM but down 8.95% YoY. From January to June 2024, the cumulative secondary lead production was 1.9351 million mt, down 8.45% YoY. In June 2024, secondary refined lead production was 275,900 mt, up 3.04% MoM but down 13.66% YoY, and was 1.645 million mt in H1, down 10.26% YoY.

The tight domestic raw material supply situation remained unchanged, especially with battery scrap being a common raw material for both secondary lead and some primary lead smelters. With the tight supply of lead concentrate, primary lead smelters dismantled battery scrap to obtain lead paste as a major raw material supplement. This also increased the pressure on secondary lead smelters to procure raw materials, leading to production reductions or suspensions in several secondary lead smelters in June due to insufficient raw materials. The enterprises contributing to the production increase in June were mainly located in Anhui, Jiangxi, Guangxi, and other regions, mainly due to the end of maintenance and resumption of production.

Entering July, the supply of battery scrap did not show significant improvement, and most secondary lead enterprises still expected a decline in July production. Additionally, the policy of canceling tax incentives, effective from August 1, might discourage some secondary lead smelters from resuming production. Overall, SMM expects secondary refined lead production in July to decrease by 33,800 mt MoM to 242,100 mt.