SMM analysis on China June primary lead production and July forecast

In June 2024, the national primary lead production was 282,700 mt, down 2.12% MoM and 3.54% YoY. In H1 2024, the cumulative primary lead production was down 4.65% YoY. The total production capacity of the surveyed enterprises in 2024 was 6.0063 million mt.

According to the survey, the maintenance of primary lead smelters increased in June, and the production continued to decline. In June, several primary lead delivery brand enterprises started maintenance from early June to the end of the month, especially in mid-to-late June, with concentrated maintenance in smelters in Henan, Anhui, and Inner Mongolia, mostly large enterprises with significant reductions. Therefore, even after the resumption of production in smelters in Yunnan, Hunan, and other regions, the primary lead production in June still recorded a slight decrease.

Entering July, the SHFE/LME price ratio expanded as the former outperformed the latter, so lead concentrate imports increased, and imported crude lead also flowed into the domestic market, easing the tight domestic raw material supply to some extent. According to the SMM survey, as of July 5, the total lead concentrate inventory at Lianyungang and Fangchenggang ports was 32,000 mt, an increase of 13,000 mt compared to the end of June. Meanwhile, the maintenance of primary lead smelters gradually ended, with smelters in Henan, Anhui, Hunan, Liaoning, and other regions resuming production, contributing significantly to the production increase in July. SMM expects primary lead production in July to increase by nearly 20,000 mt compared to June, reaching 300,000 mt.