This week’s weekly TC for domestically produced Pb50 remained unchanged at an average of 200 yuan/mt Pb, while the average weekly TC for imported Pb60 was revised down to -$165/dmt. During the week, TCs for domestically produced standard ore held steady, but the market for high-grade lead concentrates (lead content above 55%) remained tight, with mainstream transactions primarily at zero or negative TCs. Additionally, a magnitude 6.3 earthquake struck Dachaidan in Haixi, Qinghai, during the week; according to SMM, lead and zinc mines in Qinghai were unaffected and production remained normal. For imported ore, limited arrivals and high sulphuric acid prices meant smelters had strong demand for ore, pushing TCs down further, with some silver-lead ore prices reported at -$260/dmt. Amid expectations for the reopening of the Strait of Hormuz, disruption to lead concentrate supply has been minor, but market estimates suggest that if sulphuric acid prices fall sharply, thereby impacting primary lead smelter production, lead TCs may only then have a chance of stopping their decline. In the short term, ore supply remains tight.

[SMM Lead Concentrates Market Update] This week, domestic smelters reported that lead concentrate quotes in the market continued to show significant divergence. Among them, high-grade lead concentrates (with lead content exceeding 55%) remained in tight supply, with market quotes staying stable compared to last week. Some smelters noted that the slight increase in lead concentrate prices in April was because, following the weakening of precious metal prices, sellers opted to slightly raise TCs as a substitute for adjusting the payable indicator, while there were no obvious signs of easing in overall lead concentrate supply in the market.

This week, domestic smelters still noted that lead concentrate quotes varied considerably in the market, supply of high-grade (with lead content above 55%) lead concentrates remained tight, and market quotations were stable WoW. Some smelters mentioned that the slight increase in lead concentrate prices in April occurred because sellers chose to slightly raise TCs instead of adjusting the payable indicator after precious metal prices weakened, while lead concentrate supply did not show any notable easing. This week, lead concentrate TCs across regions were broadly steady, the rise in sulphuric acid prices had no significant impact on lead concentrate TCs, and silver payable indicators for lead concentrates of various silver contents held firm in the market.

According to customs data, lead concentrate imports in February 2026 were 124,580 mt in physical content, up 3.8% MoM and up 26.4% YoY; cumulative imports in January-February reached 252,241 mt in physical content, up 14% YoY on a cumulative basis. Over the same period, silver concentrate imports were about 148,600 mt in physical content, down 17% MoM and down 8% YoY; cumulative imports in January-February were 328,600 mt in physical content, down 1.27% YoY on a cumulative basis.

Supply Side: Seasonal Production Resumptions Advance, Marginal Increases Are Expected from March to April According to SMM data, affected by the traditional winter break, production at lead-zinc mines in China’s colder regions declined starting in January. After the Chinese New Year holiday in February, mines gradually began preparations to resume production, but had not yet returned to full capacity. Lead concentrate supply in north China is expected to continue improving from March to April. In terms of production, February lead concentrate production fell by about 37,300 mt in metal content MoM. In addition to fewer calendar days, mine shutdowns during the Chinese New Year holiday usually lasted 7-30 days. Mines that resumed production after the holiday gradually stabilized, forming the main source of incremental supply in March; some mines remained under winter break until late March and will not return to normal production until mid-April, while a few small and medium-sized mines are still waiting for operating permits from regulators. SMM expects lead concentrate production in March to recover to about 130,000 mt in metal content, an increase of nearly 40,000 mt in metal content from February. Market Side: Delayed Inventory Release, Diverging Procurement Strategies In terms of transactions, due to unstable mine production in February, most enterprises temporarily delayed sales offers, and lead concentrate inventory generally did not enter the market until production stabilized in March. Although the tight supply pattern is unlikely to change in the short term, volatility in precious metal prices has intensified wait-and-see sentiment among smelters, and the earlier phenomenon of “panic buying” silver-bearing lead concentrates at the cost of suppressing TCs had already faded by early March. Regional divergence has emerged: some small-scale smelters in Hunan, Yunnan, and other regions were concerned that weaker precious metal prices would leave by-product revenue insufficient to cover processing losses, and have cut primary lead production plans or extended maintenance cycles. Meanwhile, smelters’ tolerance for extremely low TCs has declined significantly, narrowing room for market negotiation. Import and Price Outlook In Q1 2026, China’s silver prices unusually generated import arbitrage, and expanding import profits for silver-bearing lead concentrates drove imports of lead concentrates and lead-bearing silver concentrates in January-February above the same period in previous years. As imported raw materials gradually arrived at plants, some producers postponed their demand for domestic spot procurement. In terms of prices, silver prices have not yet fallen below the key support level of 20,000 yuan/kg, and the payable indicator for silver content in silver-lead ore has remained stable in the short term after multiple rounds of increases. If silver prices weaken sharply and remain weak, the payable indicator for silver content may edge down slightly, and lead concentrate TC quotes may rebound as demand for precious metals weakens.

Lead concentrate TCs were thinly traded this week, and offers for imported ore remained scarce. In the domestic ore trade market, as most smelters had pre-booked Q4 lead concentrate supply orders, current TC offers were mostly for 2026 pre-sales, and some mines had completed the tender and bid for H1 2026 lead concentrates. Smelters in Henan and Inner Mongolia still had expectations for the continuous arrival of imported ore under long-term contracts, while TCs for smelters in southern China regions such as Jiangxi, Hunan, and Yunnan remained low. Production cuts due to maintenance at some smelters alleviated raw material tightness in certain areas. According to SMM, the decline in lead concentrate TCs for most was related to the inability to further raise the payable indicator for rich metal content. Therefore, TCs for low-silver lead ore and crude lead with minimal rich content remained stable. Although silver prices hit a new record high again, smelters maintained a strong demand for a stable payable indicator for silver concentrates (containing 4,000-5,000g/mt in physical content) in the ore trade market. Consequently, there were no expectations for adjustments to the silver coefficient in silver-lead ore, and no significant adjustments were observed for the silver payable indicator in silver-lead ore within other ranges.