Secondary Smelters’ Deepening Losses Prompt Holdback from Selling; Month-End Weak Downstream Demand Leaves Spot Trade Sluggish [SMM Secondary Refined Lead Weekly Review]

SMM June 26:

This week lead prices drifted lower. At the start of the week, mainstream secondary refined lead was offered around parity with SMM #1 lead, with tax-exclusive sources at lower levels; downstream resumptions saw only long-term contract deals. Mid-week, smelters held back from selling and offered sparingly, with only sporadic need-based purchases. At the weekend, the holding-back sentiment intensified, and a few spot orders rose to a premium of 25 yuan/mt. Month-end, downstream players waited on the sidelines for new-month long-term contracts, leaving spot trades sluggish throughout the week.

As of June 26, large domestic secondary lead enterprises recorded a per-mt loss of 539 yuan, while small and medium secondary smelters saw losses widen to 740 yuan/mt. Continued weakness in secondary lead prices, coupled with persistently high raw material costs for waste lead-acid batteries, deepened smelter losses WoW. Going forward, although some secondary lead smelters are expected to resume production, ongoing losses and scrap battery raw material supply constraints have led to coexisting reductions and suspensions in the market. Overall secondary lead supply scale next week is expected to be basically flat WoW, and the premium/discount range for secondary refined lead against SMM #1 lead is expected to stay between a discount of 50 yuan/mt and a premium of 50 yuan/mt.