SMM

Due to different raw material procurement habits of primary lead smelters, the raw material inventories of different smelters vary significantly. Medium and large-scale smelters involved in winter stockpiling have gradually completed their Q4 restocking, and by the end of November, the enthusiasm for purchasing lead concentrate had declined compared to October.

Compared to the lead concentrate market situation in December 2023, the supply deficit of lead concentrate in 2024 has narrowed. On one hand, the expansion pace of lead smelting capacity in 2024 has slowed down, and due to the continuous decline in pb50% and pb60% TC, the positioning of lead metal has also changed. Many lead smelters have canceled their lead metal production requirements and instead pursued comprehensive multi-metal benefits, resulting in a decline in the planned production of primary lead.

Additionally, the opening of the lead concentrate import window in 2024 provides more channels for smelters to restock for winter. Meanwhile, large-scale smelters in Jiangxi, Hunan, and Guangxi, which traditionally do not have winter stockpiling habits and have relatively sufficient funds, have also mentioned the concentration of imported ore arriving at their plants. However, it should be noted that the raw material inventories of small and medium-sized smelters not involved in imported ore trade have not significantly improved. Entering December, due to the decline in local lead polymetallic ore supply and the bullish price outlook, suppliers of silver-bearing crude lead in Hunan and Yunnan have slightly lowered their TC.

As the forward-imported ore ordered by smelters arrives at ports, the winter stockpiling of lead smelters in many northern regions in 2024 has also happened in advance, and the lead concentrate market transactions are relatively sluggish. Amid the recent continuous rise in lead prices, only a few regions have seen a slight increase in pb50% TC quotes, while most suppliers have not indicated a clear intention to raise TC, and market sentiment remains cautious. Additionally, nearing year-end, some small-scale mines or traders may have capital turnover needs, and with the recent strengthening of lead prices, there may be a slight increase of 0-50 yuan/mt (metal content) in pb50% TC quotes.

Looking ahead to Q1 2025, compared to smelters and downstream enterprises, lead-zinc ore sellers are generally more optimistic about lead metal prices at year-end and in Q1 2025. Despite the global lead-zinc mine production ramp-up in 2024, due to the scarcity of lead polymetallic ores and the prevalence of comprehensive recovery, suppliers of medium and high-silver lead ores have a more pronounced intention to stand firm on quotes. In contrast, low-silver lead ore mines indicate that pb50% TC will remain stable at year-end, and the supply-demand easing of lead concentrate in H1 2025 may not be as favorable as the zinc concentrate market. The TC situation in H2 2025 will still need to be adjusted based on the progress of new construction projects and metal richness.