Why Lead Price Skyrockets, Ignoring Weak Fundamentals? SMM Reports

Published: Jun 28, 2017 15:20 (GMT+8)

Save

Lead price surges mainly due to speculative investment and price growth of ferrous metals and other nonferrous metals, SMM notes.

SHANGHAI, Jun. 28 (SMM) – LME lead market registers firm movement recently. SHFE 1707 lead reached highest level at 17,890 yuan per tonne on June 28, and SMM #1 lead price also surged by 325 yuan per tonne to 17,700-17,800 yuan per tonne.

What is happening in lead market in China?

Refined lead market has turned to oversupply from supply shortage, as downstream battery producers stop raw material purchases and primary and secondary lead smelters resume production after the end of environmental checks.

Lead Price, Can’t Withstand Supply Increase, be Hard to Sustain Firm Growth in July, SMM Forecasts

Downstream battery producers suspend lead purchases this week, following lead price decrease on June 23. For now, offers for spot transaction from primary lead smelters reduce to discounts from premiums of 200-300 yuan per tonne, and secondary refined lead trades at discounts of 50 yuan per tonne from premiums of 200-300 yuan per tonne, both against average SMM #1 lead price. Offers from suppliers also dipped constantly, with those down to premiums of 100 yuan per tonne from 250 yuan per tonne in Shanghai, and down to 300 yuan per tonne from 500 yuan per tonne in Guangdong, against SHFE 1707 lead price.

Watch out for Lead Price Decline in Late June on Demand Decrease, SMM Warns

As such, there is a very small possibility for downstream battery producers, which are facing cash crunch at month and semi-year end, to stock up large amounts of goods in late June to early July after two-week crazy raw material stock-building in early and mid June. Lead ingot inventories at those producers can be used for about one week at present, SMM learns. Finished goods inventory decreases at battery producers, but rises at distributors, as end-user demand remains poor.

To sum up, lead price, running counter to fundamentals, soars mainly due to speculative investment and price growth of ferrous metals and other nonferrous metals. However, lead price is coming to fundamental bedrock in July, SMM expects.

For news cooperation, please contact us by email: sallyzhang@smm.cn orservice.en@smm.cn.

SHFE lead LME lead lead prices

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

For any inquiries or for more information, please contact: lemonzhao@smm.cn

For more information on how to access our research reports, please contact:service.en@smm.cn

Related News

20 hours ago

【Flash | Lumentum Commits $87 Million to Secure AXT’s InP Wafer Capacity Through 2031】

AXT and Lumentum signed a binding capacity reservation agreement for Indium Phosphide (InP) wafer substrates through December 31, 2031. AXT will reserve minimum annual product capacity and support additional capacity, while Lumentum will provide two $43.5 million deposits, totaling $87 million, to be applied as shipment credits. Lumentum is liable for annual purchase shortfalls, subject to specified exceptions, while AXT’s failure to deliver minimum capacity constitutes a material breach. SMM views the six-year commitment as a firm demand signal for InP substrates and high-purity indium. Wafer volumes, diameter mix and corresponding indium consumption were not disclosed.

20 hours ago

Oct 06, 2026 09:53 (GMT+8)

【Flash | Semtech Adds Cleanroom Space as InP Photonics Demand Ramps】

Semtech said in its Aug. 25 earnings presentation that its data-center photonics portfolio spans gain chips, high-power CW lasers, SOAs and high-speed photodiodes, while it has secured FY2027 equipment deliveries and acquired additional cleanroom space. Semtech acquired HieFo in March, adding US-based InP gain-chip and DFB-laser manufacturing. Q2 FY2027 data-center sales reached $100 million, up 39% QoQ and 91% YoY; Q3 sales are targeted to rise 45% QoQ and 160% YoY. SMM believes the buildout supports medium-term demand for InP and high-purity indium, although no nameplate capacity or indium consumption was disclosed.

Oct 06, 2026 09:53 (GMT+8)

Oct 06, 2026 09:42 (GMT+8)

【SMM Flash News】Bunker Hill Adds Metal Recovery Criteria to Its Year-End Commercial Production Target

Bunker Hill said on October 5 that its Idaho zinc-lead-silver mine remained on track to achieve commercial production by year-end 2026. The revised criteria require throughput of at least 65% of the plant’s 1,800-tonne-per-day nameplate capacity, alongside zinc, lead and silver recoveries of at least 70%, for 60 consecutive days. A 10-hole, 975-metre surface drilling programme has also started at Page.

Oct 06, 2026 09:42 (GMT+8)