SMM Chinese lead market June supply and demand review and July forecast

Supply side: In June, production at primary and secondary lead smelters initially increased but later declined, with final output falling below expectations. Since June, there has been a consistent shortage of scrap batteries, impacting secondary lead smelters, whose post-maintenance production recovery was less than anticipated. Additionally, increased maintenance at primary lead smelting facilities resulted in only a marginal increase in lead ingot supply for the month.

Entering July, medium to large primary lead smelters are expected to see some increase in supply after maintenance. However, persistent scrap battery shortages continue to pose significant challenges. In Anhui, a major production area for secondary lead, many smelters are reducing output or completely halting production. This is expected to lead to a decline in overall lead ingot supply for July, with an anticipated reduction exceeding 10,000 mt.

Consumption side: In June, the production situation for lead-acid battery companies was similar to May. With lead prices continuing to rise, most companies adopted a cautious approach, avoiding high-cost inventory build-up and generally producing according to sales demand.

Entering July, the impact of the off-season for the lead-acid battery market has lessened slightly. However, compared to previous years' pre-peak season stockpiling, companies are now more cautious in their purchasing and planning less stockpiling. Additionally, a widening price gap between domestic and international lead is adversely affecting battery exports. Export-oriented battery companies are reducing their production, which may result in a MoM decrease in the purchasing volumes of lead-acid battery companies in July.

Supply side: In June, production at primary and secondary lead smelters initially increased but later declined, with final output falling below expectations. Since June, there has been a consistent shortage of scrap batteries, impacting secondary lead smelters, whose post-maintenance production recovery was less than anticipated. Additionally, increased maintenance at primary lead smelting facilities resulted in only a marginal increase in lead ingot supply for the month.

Entering July, medium to large primary lead smelters are expected to see some increase in supply after maintenance. However, persistent scrap battery shortages continue to pose significant challenges. In Anhui, a major production area for secondary lead, many smelters are reducing output or completely halting production. This is expected to lead to a decline in overall lead ingot supply for July, with an anticipated reduction exceeding 10,000 mt.

Consumption side: In June, the production situation for lead-acid battery companies was similar to May. With lead prices continuing to rise, most companies adopted a cautious approach, avoiding high-cost inventory build-up and generally producing according to sales demand.

Entering July, the impact of the off-season for the lead-acid battery market has lessened slightly. However, compared to previous years' pre-peak season stockpiling, companies are now more cautious in their purchasing and planning less stockpiling. Additionally, a widening price gap between domestic and international lead is adversely affecting battery exports. Export-oriented battery companies are reducing their production, which may result in a MoM decrease in the purchasing volumes of lead-acid battery companies in July.