Lead Prices Surge and Fall, Discounts of Secondary Refined Lead Narrow

Last week, LME lead opened at $2,146/mt, briefly touching a low of $2,141/mt at the beginning of the session. As the US dollar weakened, LME lead surged to $2,245/mt, and closed at $2,207/mt, up 1.61%.

The most-traded SHFE lead contract (2408) opened at 18,540 yuan/mt, briefly touching a low of 18,415 yuan/mt. Later, due to tightening domestic lead ingot supply and bullish sentiment, it surged to 19,560 yuan/mt. In the latter half of the week, the contract fell back and closed at 18,735 yuan/mt, up 0.59%.

In the spot market, SMM #1 lead prices fluctuated between 18,600-19,125 yuan/mt last week (June 17-21). Driven by unexpected production cuts in secondary lead, spot supply tightened again, pushing domestic lead prices higher, breaking the 19,000 yuan/mt mark mid-week before falling back under pressure. Near the week’s end, several smelters in Henan sold out their inventories and arranged pre-sales based on downstream demand. Sellers offered discounts of 50 yuan/mt against the SHFE 2407 lead contract or premiums of 100-150 yuan/mt against SMM #1 lead. In contrast, supply in Hunan and Guangdong was relatively ample, preventing trades with high premiums from occurring. Non-deliverable brands primary lead was offered at premiums of 20-50 yuan/mt against SMM #1 lead. Some small factories sold at small discounts as lead prices rose. In the trade market, a few warrants in Jiangsu, Zhejiang, and Shanghai were offered at premiums of 30-50 yuan/mt against the SHFE 2407 lead contract, but market supply was limited, and total transactions were scarce. Due to the continuous rise in battery scrap prices, secondary refined lead turned from profitable to loss-making, exacerbating supply tightness. Near the week’s end, secondary refined lead prices were flat from or slightly higher than SMM #1 lead prices, with downstream procurement turning to primary lead smelters and social warehouses. Transactions in a few regions improved compared to the previous week.