Lead Prices Retreat After Rapid Rise, Downstream Procurement Remains Cautious [SMM Secondary Refined Lead Weekly Review]

SMM May 8 update:

This week, SMM #1 lead ingot prices rose before fluctuating downward, and secondary refined lead premiums converged from wide discounts toward parity. At the beginning of the week, smelter quotes were somewhat divergent, generally ranging from a discount of 0-75 yuan/mt, with downstream purchasing on demand and trading improving. Mid-week, lead prices pulled back, and quote divergence widened to a range of discount 75 yuan/mt to premium 50 yuan/mt, with spot order trading turning sluggish. At the weekend, smelters held prices firm, narrowing quotes to near parity, with downstream mostly adopting a wait-and-see approach and sluggish transactions. Currently, both supply and demand were weak, and premiums are expected to move sideways within the range of discount 75 to premium 50 yuan/mt next week.

Affected by pressure on finished lead profits and rising scrap battery raw material costs, smelter losses intensified: as of May 8, large enterprises posted losses of 141 yuan/mt, and small and medium-sized enterprises posted losses of 345 yuan/mt. Although smelter production cuts and shutdowns have increased, the tight raw material situation remains unchanged, and with costs staying elevated, smelter losses are expected to see little significant relief.