SHANGHAI, Jun 20 (SMM) – The price spread between secondary refined lead and SMM #1 lead is likely to widen in July as supply of the former is set to increase on eased environmental restrictions, SMM expects.
Although environmental probes in recent months tightened the supply of secondary refined lead, the price spread saw no signs of narrowing and maintained at around 100 yuan/mt for three consecutive weeks. This is due to sluggish demand from battery producers.
As of Wednesday June 20, SMM #1 lead price stood at 20,175 yuan/mt and that of secondary refined lead at 20,050 yuan/mt. This is within a typical price spread of 100-200 yuan/mt.
But as inspection teams are scheduled to leave Hebei and Henan provinces in late June, secondary lead smelters in the region are set to resume operations before July, SMM learned. In fact, some in Hebei has already resumed production as they have passed the inspection.
In Jiangxi and Guangdong, smelters are expected to return operations in early July.
Secondary lead smelters would be eager to come back to operations due to good profits as prices of battery scrap declined. SMM assessed the price of electric bicycle battery scrap at 10,350 yuan/mt on June 20, down 400 yuan/mt from an all-time high of 10,750 yuan/mt on May 25.
China’s stricter environmental protection drives saw secondary lead production in Anhui affected in April, while output was impacted in provinces of Yunnan, Sichuan, Jiangxi, Guangdong, Hebei and Henan in May and June.