Weak Supply and Demand, Lead Prices Fluctuate [Institutional Commentary]

On Wednesday, the most-traded SHFE lead PB2506 contract fluctuated rangebound during the day and narrowly fluctuated at night, while LME lead fluctuated upward. Spot market: In the Shanghai market, Chihong lead was quoted at 16,875-16,975 yuan/mt, with premiums of 50-100 yuan/mt against the SHFE lead 2505 contract; Jijin lead was quoted at 16,825-16,855 yuan/mt, with premiums of 0-30 yuan/mt against the SHFE lead 2505 contract. In the Jiangsu-Zhejiang region, JCC lead was quoted at 16,825-16,855 yuan/mt, with premiums of 0-30 yuan/mt against the SHFE lead 2505 contract. Suppliers followed the market to sell goods, with significant differences in quotations. Ex-factory cargoes of primary lead were generally sold at discounts (against the SHFE lead 2505 contract), and the secondary lead market showed large differences in quotations, with price spreads reaching up to 100 yuan/mt in the same region. Secondary refined lead was quoted at discounts of 100-0 yuan/mt ex-factory against the SMM 1# lead average price. Downstream buyers purchased at low prices, and the enthusiasm for inquiries increased.

Overall, the quotations for used batteries continued to rise, with strong cost support. The scope of production cuts at secondary lead smelters expanded, providing support on the supply side. However, due to the off-season for battery consumption, some battery companies completed stockpiling before the holiday, and the expectation for purchases weakened, with limited demand support. Currently, both supply and demand are weak, and the sustainability of the lead price rebound is insufficient, with a short-term return to fluctuations.