[SMM Analysis: Production Recovery After Maintenance, May's Primary Lead Output May Fully Recover from Decline]

SMM, April 30: In April 2025, the national primary lead production shifted to a downward trend, declining by 3.95 percentage points MoM and increasing by 9.75 percentage points YoY. The cumulative primary lead production from January to April 2025 rose by 6.55 percentage points YoY.

It is understood that in April, large enterprises in Henan province conducted equipment maintenance as planned, which was one of the main factors contributing to the decline in primary lead production this month. Meanwhile, lead prices fell sharply in April compared to March. The most-traded SHFE lead contract dropped consecutively in early April from a peak of 17,805 yuan/mt in late March, with lead prices hitting a low of 16,165 yuan/mt. The decline in lead prices exceeded 1,500 yuan/mt, dampening the production enthusiasm of lead smelters. Lead smelters in Yunnan, Jiangxi, and other regions took the initiative to cut production or implement new maintenance plans. During this period, although some smelters in Yunnan and Hunan provinces resumed production after completing maintenance, their production capacity scales were relatively small, or the increase in production was relatively small, which did not alter the downward trend in primary lead production this month.

In May, the relatively concentrated resumption of production by primary lead smelters after maintenance will reverse the production decline seen in the previous month. Large enterprises, represented by those in Henan, resumed production, and smelters in Yunnan, Hunan, and other regions continued to ramp up production in May after resuming production in April. In addition, lead smelters in southwest and east China plan to conduct routine maintenance, but the impact on May's production is limited. Overall, primary lead production in May is expected to increase by over 10,000 mt MoM.

Moreover, since April, the tariff hike by the US has intensified. According to customs data, approximately 10% of China's lead concentrate imports in 2024 originated from the US. After the tariff hikes this year, the supply of lead concentrates from the US has significantly decreased, exacerbating the tight supply of domestic raw materials. While smelters are increasing their production schedules, we need to be vigilant about the impact of raw material supply issues on lead ingot production. If the supply of raw materials becomes even tighter, there is a possibility that the increase in primary lead production may fall short of expectations.