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.

The lead concentrate market remained stable this week, with imported ore continuing to show a tight trend. Significant differences persisted in the specific price negotiations for 2026 long-term contracts. In the domestic ore trading market, as most smelters had pre-booked lead concentrate supply orders for Q4 in advance, offers for circulating cargoes were scarce in the market. Mine offers were primarily focused on pre-sales for 2026, with individual mines having already completed tenders and bids for lead concentrates in H1 2026. Following the arrival of imported ore under long-term contracts at smelters in Henan, Inner Mongolia, and other regions, domestic procurement demand experienced a slight decline. TCs for smelters in southern regions such as Jiangxi, Hunan, and Yunnan remained low. However, due to factors including maintenance shutdowns or lack of full production plans at some plants, there were no clear signs of a further decline in lead concentrate TCs in the market. According to SMM, the decline in lead concentrate TCs for most parties was related to the inability to further increase the payable indicator for associated metals. Consequently, TCs for low-silver lead concentrates and crude lead with minimal associated metals remained stable. Silver prices once again hit record highs, yet the payable indicator for silver concentrates (containing 4,000-5,000g/mt in physical content of silver) in the ore trading market was not adjusted further. Some market traders exhibited cautious sentiment towards high silver prices, leading to a lack of significant adjustments in the payable indicator for silver contained in silver-lead ores of other grades as well.

Tender and bid prices for the imported ore market were reported successively, with some smelters locking in long-term contracts for 2026. However, related TCs have fallen to -160~-200 $/dmt, leading to a generally cautious stance among smelters. In the domestic ore trading market, smelters in Henan, Inner Mongolia, and other regions continued to purchase as needed, maintaining lead concentrate TCs at 300-400 yuan/mt in metal content. Some smelters, after making advance payments and securing lead concentrate supplies for the next 2-3 months, suspended their market quotes. The situation of production decline due to lead concentrate supply deficit in southern smelters, including those in Jiangxi, Hunan, and Yunnan, has not eased. A smelter in Yunnan mentioned that although the TCs for low-silver lead concentrates did not decrease, the starting silver content pricing was lowered to 50g/mt in physical content, effectively reducing the TCs. This week, a significant rise in silver prices led to substantial by-product profits for smelters. In the short term, smelters may still focus on maximizing comprehensive by-product benefits and are willing to pay lower lead TCs for lead concentrates containing silver and other minor metals.

Offers in the imported ore market were scarce, with no further actual transaction quotes for forward imported lead ore. Some traders mentioned that due to the supply deficit, TCs of imported lead concentrates remain more likely to fall than rise. In the domestic ore trading market, smelters in Henan, Inner Mongolia, and other regions continued purchasing as needed. TCs for low-silver lead concentrates were maintained at quotes of 300-400 yuan/mt in metal content, while offers of 500 yuan/mt in metal content for low-silver lead concentrate TCs have almost disappeared. Except for some plants receiving imported ore and processing trade silver concentrate long-term contracts that were ordered in advance as scheduled, with relatively firm quotes, a few smelters still passively accepted sellers' lower TC quotes when making just-in-time procurement of lead concentrates. In southern regions such as Jiangxi, Hunan, and Yunnan, smelters experienced declines in operating rates due to lead concentrate supply deficits. A small number of plants, to ensure production plans, procured low-silver lead concentrates at zero or negative TCs, though market transactions remained relatively thin. Recently, as silver prices entered a volatile adjustment phase, many market traders maintained bullish expectations for future precious metal prices. The payable indicator for silver content in lead concentrates has not yet seen a pullback and may remain high amid the shortage.

Imported ore market, This week, the imported lead concentrate market remained sluggish. Although a few traders mentioned recent tender offers ranging from -$150 to -$160/mt (metal content), no further actual transactions were observed in the market. Domestic ore trade market, Domestically, the significant disparity in TCs between north and south China persisted. Smelters in regions such as Henan and Inner Mongolia continued winter stocking, while some lead-zinc mines in remote areas are expected to enter routine shutdowns in mid-to-late November. Some producers temporarily alleviated lead concentrate supply pressure through maintenance-related production cuts or early arrangements for imported ore raw materials, which kept offers from smelters in north China relatively firm. Smelters in south China, including Hunan and Yunnan, generally reported difficulties in procuring even low-silver lead concentrates. To cope with tight raw material supply, some smelters adopted partial production line suspensions or reduced feed volumes. Only a few producers, to ensure production schedules, procured low-silver lead concentrates at zero or even negative TCs. Amid recent significant fluctuations in silver prices, both mines and smelters maintained a cautious wait-and-see stance. In the short term, the payable indicator for silver in lead concentrates is expected to remain stable.