[SMM monthly Outlook] lead battery traditional consumption peak season or lead price will usher in spring?

SMM7 March 31: July Shanghai lead is a twists and turns, the highest level reached 15740 yuan / ton, as of today's intraday close, the Shanghai lead index was 15670 yuan / ton, an increase of 6.17% within the month. Looking back on the fundamentals of lead, the supply of waste batteries in July is still tight, and the price is strong, eroding the profits of recycled lead enterprises; in terms of consumption, domestic lead battery consumption may enter the traditional peak season in the third quarter, and long-term consumption is worth looking forward to. Overall, lead fundamentals support lead prices to some extent.

In August, we need to pay close attention to the traditional lead battery consumption season, consumption may boost lead prices, but at the same time, the gradual release of new capacity expansion of recycled lead will continue to interfere with the rising pace of lead prices.

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On the supply side, Henan Yuguang is in the state of replacement production line in July, the production is unstable, the output is further tightened, some of the superimposed primary lead smelters enter the state of maintenance, and the primary lead production is expected to show a downward trend in July. As for recycled lead, the supply of waste batteries is still tight, the price is strong, and the cost of recycled lead remains high, which is conducive to boost lead prices, but we still need to pay attention to the release of new capacity expansion of recycled lead in the later stage.

In terms of consumption, the domestic demand for automobile battery replacement shows signs of improvement, but the terminal consumption of electric bicycle battery market has not improved greatly for the time being, and due to the high lead price, most of the early dealers have hoarded a certain amount of inventory. From an overseas point of view, with the gradual recovery of the economy of various countries, export orders for lead-acid batteries have improved slightly, and we still need to pay attention to the trend of the overseas epidemic.

On the whole, the lead battery market consumption season is worth looking forward to, or it will become one of the important factors to continue to support the lead price for some time in the future.

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