Ore Ingot Supply-Demand Imbalance Stands Out; Primary Lead Production Records Negative Growth in 2024 [SMM Survey]

         SMM, December 31: In November 2024, China's primary lead production continued its upward trend, increasing by 3.91% MoM and 9.55% YoY, reaching a record high for monthly production. From January to November 2024, cumulative primary lead production declined by 2.95% YoY. The total capacity of surveyed enterprises in 2024 was 6.0063 million mt.

         According to the survey, December marked the final month of 2024, during which primary lead production aligned with the decline forecast in the previous report, with the decline further expanding. The primary reasons for the production decrease this month included routine year-end maintenance and equipment upgrades at smelting enterprises. Additionally, in mid-to-late December, environmental protection inspections were conducted in Hunan, leading to production cuts at most lead smelting enterprises in the region, further amplifying the decline in lead production. Even though lead concentrate grades improved and new production lines ramped up in regions such as Inner Mongolia, Henan, and Qinghai, these increases were insufficient to reverse the downward production trend for the month.

         Moreover, annual primary lead production in 2024 recorded negative growth, primarily due to the fundamental imbalance between the limited supply of lead concentrates and surplus capacity at the ingot end. This imbalance drove lead concentrate TC to historically low negative levels, resulting in declining overall profitability for the lead smelting industry. Consequently, lead products became marginalized in the production configuration of smelting enterprises, even being relegated to "by-product" status.

         Looking ahead to January 2025, SMM forecasts that China's primary lead production will continue its downward trend, with a projected MoM decline of 3.7%. In January, the Chinese market will observe the Chinese New Year, with the holiday spanning from late January to early February. Historically, some lead smelting enterprises have chosen this period for equipment maintenance, potentially dragging down January's lead production. Specifically, large and medium-sized lead smelting enterprises in regions such as Hunan, Guangdong, and Guangxi plan to conduct maintenance in January, which is expected to result in a reduction exceeding 10,000 mt.