Lead market supply and demand analysis

Supply Side: In May, primary lead enterprises experienced both maintenance and recovery, with production remaining relatively unchanged from April. However, secondary lead production saw a reduction of approximately 60,000 mt due to the implementation of the "reverse invoicing" policy for battery scrap, which led to a decrease in battery scrap recycling. In June, the impact of the "reverse invoicing" policy on battery scrap weakened, and recycling and smelting enterprises resumed normal operations. Additionally, with the end of maintenance at medium and large enterprises in regions such as Anhui and Jiangxi, and considering the limitations of battery scrap availability during the traditional off-season, production is expected to increase by about 20,000 mt MoM, becoming the main driver of increase in lead ingot production this month.

Consumption Side: In May, the lead-acid battery market was in the traditional off-season. Despite the strong rise in lead prices, battery prices lacked upward momentum. Most enterprises relied on long-term lead ingot contracts and previous lead ingot inventories to produce. Even though the overall operating rate of lead-acid battery enterprises showed a slight increase, the actual lead procurement volume decreased compared to April. In June, the end-user consumption in the lead-acid battery market showed limited improvement. Major enterprises expected stable production, and due to high lead prices, enterprises were cautious in procurement, mostly maintaining a restock-as-needed approach.