[research on recycled lead] in the next 3-5 years, the recycled lead industry or reshuffle lead price rebound and other peak season arbitrage is suggested to do so.

1. Domestic production status of recycled lead

In 2019, China's recycled lead production accounted for more than 45% of the domestic refined lead output. The national disassembly capacity of waste batteries is huge, and the competitive operation of recycled lead production capacity depends on the organization of waste supply channels and the profit level of recycled lead production capacity. After the cooling of environmental protection, the upper end of the recycled lead industry is generally faced with competition in raw material organization and technological scale, while the downstream recycling industry not only has no pricing power, but also faces the pressure on the profits of registered brands and additional products in the primary lead industry. Moreover, the lead-acid battery itself, an important consumer area of the lead industry, has comprehensively suffered from the erosion of lithium batteries in the share of electric bicycles and fixed power sources. In addition to the safety and temperature adaptability of lead-acid batteries, along with the continuous decline in the price of lithium products, the price advantage must also be the starting point for lead-acid batteries to hold on to their share.

2. The basic situation of the subjects.

The research object is located in Jieshou Tianying recycled lead Recycling economy Industrial Park. In 2018, the park recycled and utilized about 500000 tons of waste lead-acid batteries, processed and produced 330000 tons of recycled lead, accounting for about 1x3 of the national market share; annual production of 86 million sets of plates and 60 million batteries, accounting for about 5% of the national total, forming a closed industrial chain of "one old battery in, one new battery out".

The research company is a wholly owned subsidiary of the leading power supply enterprise, engaged in the recovery and processing of waste storage batteries, the main products are crude lead, electrolytic lead, refined lead, alloy lead, ABS plastics, etc., forming a lead cycle industry chain of "lead-acid battery recovery-lead regeneration and reduction-lead smelting-lead-acid battery manufacturing". The products not only help to ensure the raw material supply of the group power supply company, but also have close cooperation with the major domestic power plants, and the supply area is all over the country, and now it has become one of the largest and most equipped recycled lead processing enterprises in the country. This time, we will mainly visit the second phase of the project. The second phase of the project was put into operation at the end of November 2018. After production line debugging and production capacity climbing, the second phase of the project has now been operated to deal with 600000 tons of waste lead-acid batteries and 66600 tons of lead-containing waste, with an annual output of 450000 tons of recycled lead. Annual production capacity of 50, 000 tons of modified plastic, 60, 000 tons of sulfuric acid, 1500 tons of refined tin, 1050 tons of high antimony lead and other by-products.

3. The automation of production process brings great shock.

Automation is the most intuitive and ubiquitous feeling of this visit! The technology, environmental protection and low labor cost of research enterprises represent the largest lead recycling efficiency in China and even in the world. In terms of technology:

The main results are as follows: 1) at the raw material end, there are three giant waste pools, the acid-containing batteries have been sorted and treated in the early stage of recovery, and the electric vehicle batteries are acid-free and can be disposed of directly.

2) the whole process of crushing, feeding, screening and crawler automation: three dedicated waste pools correspond to three automatic disassembly lines, and automatic feeding is realized through the "corridor". Grid recycling treatment is connected with lead alloy production, and lead, tin, antimony and calcium alloys can be made directly according to customer requirements, while plastic recycling, color sorting and direct granulation through color machine, pure color plastic can be directly used in battery shell.

3) Electrolytic lead, fire lead, two processes and two furnaces: the content of electrolytic lead can reach the delivery standard, but there is no market and convenient delivery drive;

The oxygen-rich side-blowing furnace of the main system, the largest reduction furnace in the world, can provide lead liquid 24 hours a day, and can be flexibly allocated according to production scheduling, raw material organization and profit. The system operates completely closed, and the waste heat is used for power generation for its own use.

4) waste protection is the most important, online and offline multi-channel recycling, multi-point layout;

5) downstream, in addition to supplying its own battery factory, it also supplies to the park and other battery production enterprises.

4. the long-term downward price of lead has to suppress "waste", and it is difficult for the recycling industry to lose money for a long time.

The recycled lead industry is profitable and still passively depends on the recycling price of waste batteries, while the quotation for recycling of waste batteries refers to the proportion between the market lead price of 52%. Usually the cost of battery recovery is more than 54%, the profit of the recycling industry is difficult, and 55% has little profit. After deducting the recovery cost of batteries and by-products such as plastics, the rest is basically the fixed cost of waste recycling, which is roughly at the level of 6000 yuan / ton. After the rectification of environmental protection, the professional point of view had expected that the recovery cost of the recycling industry would be greatly increased, and the market estimated cost would increase by 800 won 1500 yuan / ton. After the large-scale upgrading of the recycling industry, the rising cost mainly erodes the profits of the manufacturers.

From a distance, with the normal development of the market economy and the industry, it is impossible to keep nearly 50% of the recycling industry on the edge of loss for a long time, but at present, the scale of existing and new production capacity of storage and disassembly and recycled lead is still much larger than the annual supply of storage and waste battery. compared with the price of finished lead, the market-oriented waste supply and demand price is more likely to stagnate and slow down, and the recycled lead industry is facing strong competition from upstream procurement and downstream consumption at the same time. Different from copper, aluminum and galvanized steel, the cycle of battery recycling is shorter, and the total amount of annual recovery does not change much. Take Fuyang as an example, there are seven enterprises in the two industrial parks with a capacity of 1.7 million tons of recycled lead, which requires 2.5 million tons of waste per year, while the replacement of lithium electricity has intensified the production and marketing situation of lead-acid batteries, and the recycled lead industry may reshuffle in the next 3-5 years. Leading enterprises such as research projects, which are extremely automated and large-scale, have more advantages, and the production cost is now the lowest in the same industry.

Lead-acid battery needs to maintain the cost advantage in the competition with lithium battery, and the lead price goes down for a long time, but the downward space of the new stage should start with the price of waste, which is still a commodity in China. In the future, with the reshuffle of the recycled lead industry and the gradual replacement of lithium electricity, the supply and demand situation of waste may change from "tight" to "balanced". Similar to the bottom price of lun lead which has fluctuated for a long time, the domestic lead price will also be bottomed out for a long time. Recycled lead enterprises that survive strong competition will also have long-term stable profits. This is the return due to the high input and intensive recycled lead enterprises under the social responsibility of implementing the producer responsibility system and solid waste treatment.

In the support of futures service real economy, whether recycled lead enterprises can be registered according to delivery grade is still the hottest discussion. After many investigations, the current large-scale high-quality recycled lead enterprises are mainly electrolytic lead products, and the effect of bismuth in pyrometallurgical lead on the efficiency of storage battery is still inconclusive. If the Shanghai Futures Exchange tries to register recycled electrolytic lead products, the capacity of Shanghai lead futures will be expanded, and the recycled lead industry will more actively participate in the strategies of futures hedging, inventory management, cash arbitrage and risk-free arbitrage, which will greatly improve the competitive efficiency of high-quality enterprises.

5. Lead price in summer can be expected in peak season.

1) the production capacity of newly added recycled lead has a long commissioning period and a slow speed of reaching production.

The large scale of domestic new waste dismantling and recycling and the substantial reduction of environmental protection pressure are the supply-side factors that are bearish on lead prices in the market this year, which have been reflected in the pricing. However, the new input regenerated lead production system is very consistent and automatic, the equipment debugging and running climbing stage takes longer than the old capacity, the price fluctuation needs to reflect the actual change of recycled production, and the profits of recycled lead production since the beginning of this year have always been mediocre. In the medium term (3 months), it is considered that there are too many supply risks in the market all in, while the average increase in recycled lead supply in the final third quarter may lead to poor expectations. Lead prices rebounded.

2) the storage battery inventory is limited, and the seasonal consumption can be expected.

Power supply enterprises fix production by sales, and the output of lead-acid battery products is adjusted according to the downstream electric bicycle manufacturers. The peak period of lead-acid battery has passed, and the order adjustment of power enterprises is flexible, so it is difficult to form large-scale inventory at the supply side. As a result, marginal demand driven by seasonal consumption may still dominate the rhythmic rebound in the lead market. In the domestic market, it is generally believed that the negative growth of electric vehicle sales this year is limited, while the demand for steam storage has bottomed out, and the high temperature in summer may bring a replacement peak, while the restart of the overseas economy may also lead to a wave of battery reset, and consumption is expected during the peak season.

3) Strategy revision

Ten thousand four integer mark is a strong support, spot lead prices break through 14500 pace rebound, the need for seasonal consumption boost, and with medium-term (3 months) regeneration supply is limited, tired warehouse range is not high and other fundamental performance.

Positive strategy, temporarily not optimistic about the spread between 2007 and 2008 to expand before the end of June, the peak season in the future, spot discount has been a drag on the income of the contract between 2006 and 2007. Before delivery in mid-July, yield spreads in 2007 may be magnified, but less liquid. Combined with the removal of the storage battery in the peak season, which started in late July and August in previous years, it is suggested to pay more attention to the difference between 2008 Mel 2009 and 2008 Mel 2010.

Source of this article: Guotou Anxin Futures

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