SMM6 14: in June, although the upward trend of lead prices did not change, but the overall rally slowed down compared with May. Today, the main lead in Shanghai 1807 contract high dive, once down to 20180 yuan / ton, down 1 per cent in the day. So what is the trend of lead prices in the later period?
In terms of supply:
1. excluding the primary lead refineries that entered the maintenance according to the plan, coupled with the central environmental protection inspection, such as Henan, Guangxi and other refineries limited production by 30 or 50 percent, once again reduced the contribution of primary lead production in June, and is expected to reduce by nearly 20,000 tons.
2. as a result of the one-month "looking back" inspection work carried out by the central environmental protection inspection in various localities, the environmental protection impact of the recycled lead market has increased compared with May. for example, regenerated lead refineries in Jiangxi, Henan, and Hebei are generally restricted. Although some refineries in Anhui, Guizhou and other places resumed production after the inspection, but because the contribution is not enough to offset the reduction, it is expected that the amount of regenerated lead will be reduced by about 10,000 tons.
In terms of consumption:
In June, the overall market consumption of lead-acid batteries did not improve significantly for the time being, and most of the consumption expectations were reflected ahead of schedule in May. And dealer battery inventories have not yet been digested (for example, car battery dealer inventories have risen from about a month at the end of April to nearly two months in May), resulting in a marked decline in purchasing power in June. SMM expects the start-up rate of lead-acid battery companies to decline in June.
As of June 8, inventories of lead ingots in Shanghai and Guangdong continued to fall to 11000 tons, down 33000 tons from the same period last year.
Overall, the environmental impact intensified in June and will run through June. the primary lead, recycled lead and lead battery markets have varying degrees of impact, but the impact is more focused on the supply side. Recently, the news of environmental protection and production restriction has been gradually digested by the market, the traditional peak season of the battery market has not arrived, and the overall consumption is still weak; And the current lead price is strong inside and weak outside, the import window is still open, will make up for part of the supply gap, the market long and short differences intensified, short-term lead prices are still expected to fall back risk. At the same time, the environmental impact will continue until early July, in the absence of a significant increase in supply, spot lead is expected to remain strong support at the 20,000 integer level.