[SMM analysis] is it difficult to break through the tight encirclement around Shanghai lead Wanwu?

SMM9 March 17: since August 20, Shanghai lead overall showed a downward trend, recently around Wanwu consolidation. Today's Shanghai lead continued yesterday's decline, the main 2010 contract as low as 14805 yuan / ton, as of today closed at 14870 yuan / ton, a decline of 1.03%.

From a fundamental point of view, the production of primary lead is stable. With regard to recycled lead, due to the implementation of the new solid waste law, waste batteries are restricted by the long administrative cycle of transshipment orders, it is difficult to transport across provinces, and most unlicensed waste battery traders take a wait-and-see attitude. Superimposed enterprises must abide by the national regulations on the management of the transport of dangerous goods, while the cost of vehicles transporting dangerous goods is high, and the traders of waste batteries are willing to sell them at a high price. As a result, the supply of waste batteries in Henan, Anhui, Jiangsu and other places is more tight than before, the price of waste batteries remains high, and the cost line of recycled lead still gives some support to the price of lead. As the inventory of raw materials in medium and large licensed smelters is abundant, and the output of recycled lead has not shrunk, according to SMM research, as of September 11, the operating rate of recycled lead was 59.03%, up 0.62% from the week of September 4.

"Click to view the SMM lead industry chain database

On the consumer side, battery consumption is relatively light. At present, lead battery enterprises mainly purchase on demand, and the National Day reserve is not as expected. According to SMM, large battery factories basically complete the inventory, and it is difficult for consumers to provide upward power for lead prices.

Overall, the lower part of lead is supported by the cost of recycled lead, while the lack of bright spots on the consumer side shows a lack of upward power. It is expected that short-term lead prices will remain volatile, and the impact of the new solid waste law on the production of recycled lead should be paid attention to in the follow-up.