The Profits of Secondary Lead Smelters Shrank

SHANGHAI, Feb 6 (SMM) - The average price of SMM #1 lead ingots went down from 15,565.9 yuan/mt on December 30, 2022 to 15,326.6 yuan/mt on January 31, dragging down the settlement prices of secondary lead smelters under long-term contracts. The prices of battery scrap dropped less sharply. Taking e-bike battery scrap as an example, its prices dipped from 9,150 yuan/mt on December 30, 2022 to 9,109 yuan/mt on January 31. As a result, the profit margins of secondary lead smelters who sold under long-term orders shrank. However, secondary lead smelters who sold their cargoes to the spot market managed to report profit margins of roughly 200 yuan/mt, even as a few struggled to break even. Considering that the overall profit margins of secondary lead smelters remain high at the current lead prices, profitability-driven output cuts are unlikely to occur in the foreseeable future.