In July 2023, the domestic output of refined lead was 319,700 mt, an increase of 9.1% month-on-month and 21.94% year-on-year; the cumulative output from January to July 2023 increased by 17.63% year-on-year. Total production capacities of enterprises in the survey totalled 5.84 million mt in 2023.
According to the SMM survey, large-scale refined lead smelting enterprises in Henan, Yunnan, Inner Mongolia, Shandong and other regions completed their maintenance and resumed production in July, growing output. During the period, lead smelting enterprises in Yunnan, Hunan and Anhui failed to reach full production due to maintenance or insufficient supply of lead concentrate, resulting in regional supply tightness.
In August, the production of most refined lead smelting enterprises will be relatively stable, and the output in August is expected to stabilise. A large-scale producer of deliverable brand in Henan has plans to cut output sharply in August due to maintenance from August 1-20. Meanwhile, enterprises in Henan, Anhui, Hunan and other places will end maintenance. China's refined lead output is estimated at around 320,000 mt in August. In addition, we need to continue to pay attention to the supply of lead concentrate in August, and whether the impact on the production of lead smelting enterprises will increase. The Central Economic Commission of the Wa State issued the Notice on the Implementation of the Suspension of All Mineral Resources Exploitation in May.
Since August 1, the Wa State of Myanmar has stopped all exploration, mining, and processing operations at all mines. According to Customs data, China's imports of lead concentrate from Myanmar accounted for 6% of the total imports in 2022, and the main users were refined lead smelting enterprises in Yunnan. Since the policy has been released for 3 months, most of the Chinese lead smelting enterprises have restocked lead concentrate stocks. However, since the production halts at mines in Wa State, the supply of lead concentrate market has become tighter. This lowered TCs of lead concentrate again with TCs of Pb 50% lead concentrate in Yunnan at a low of 800 yuan/mt with metal content). The supply issue of lead concentrate, if further escalated, will restrict the production of refined lead enterprises. And the output in August can fall slightly.
