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[SMM monthly Prospect] lead battery consumption is sluggish in peak season. In September, the center of gravity of lead price further moved down.
Sep 1,2020 10:46CST
translation
Source:SMM
[September lead price forecast] SMM believes that the increase of recycled lead may still exist in September, while the lead battery consumption season is sluggish, the battery factory procurement demand is unlikely to increase, the overall trend of oversupply is still there, and the fundamentals are difficult to increase the upward force for lead prices, but the price of waste batteries may become a support, and lead prices are expected to maintain a volatile trend in the early September. However, the consumption of lead ingots in late September is not clear, and it is expected that the overall focus of lead prices in September will be further lower than that in August.
The content below was translated by Tencent automatically for reference.

SMM8 March 31: in August, the Shanghai lead Index showed a trend of rising first and then suppressing it. In early August, Shanghai lead soared all the way to a peak of 16530 yuan / ton, then fell one after another, reaching a low of 15555 yuan / tonne. As of today, it closed at 15590 yuan / ton, down 0.51 per cent during the month.

From a fundamental point of view, some primary lead smelters such as Yunnan Chihong finished maintenance in August and resumed normal production. However, according to SMM research, a smelter recently began maintenance, which is expected to affect for a month. The output of the primary lead smelter is offset by the increase and decrease, and the production of the primary lead smelter is expected to be stable in September.

In terms of recycled lead, due to the sharp rise in lead prices in early August, the profits of recycled lead smelters are considerable, the enthusiasm of enterprises to increase production and put into production is high, and the operating rate of recycled lead continues to increase. Subsequently, the decline in lead price widened, and the price of recycled lead raw material waste battery was easy to rise and difficult to fall, compressing the profits of recycled lead enterprises, or even losing money, the production enthusiasm of smelters declined, and the overall supply increase of recycled lead in August was not as expected. September still needs to pay attention to the production capacity release of recycled lead. In addition, it is worth noting that the new "solid waste Law", which came into effect on September 1, may have an impact on the transportation of waste batteries, which may be manifested as a ban on inter-provincial transportation or a substantial increase in transport costs, resulting in high prices of waste batteries. it plays a certain role in supporting the price of lead.

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On the consumer side, in early August, due to the sharp rise in lead prices and lead battery consumption in the peak season of traditional consumption, battery prices rose twice in succession, and the output of some large lead battery enterprises also increased. However, since the middle and late August, the consumption performance of lead-acid batteries is mediocre. Because of the high inventory of finished products in the early stage, some of the downstream enterprises are mainly digested inventory, which leads to the low willingness of the lead-acid battery factories to keep the rigid demand, coupled with the fact that some battery factories take high-temperature holidays, resulting in a weakening demand for lead ingots in late August. At present, the high-temperature holiday is almost over, and battery factories are expected to release further rigid demand in early September, and lead ingot consumption will pick up somewhat, but in late September, concerns about National Day and subsequent consumption may affect the next mood of battery manufacturers.

SMM believes that the possibility of the increase of recycled lead in September may still exist, while the lead battery consumption season is not prosperous, it is unlikely that the purchasing demand of battery factories will increase, the overall trend of oversupply is still there, and the fundamentals are difficult to increase the upward force for lead prices, but the price of waste batteries may become a support, and lead prices are expected to maintain a volatile trend in the early September. However, the consumption of lead ingots in late September is not clear, and it is expected that the overall focus of lead prices in September will be further lower than that in August.

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