Lead Prices Likely to Stand High after Gaining over 13% in Just 15 Trading Days

Published: Oct 22, 2021 15:16

Save

The most traded SHFE lead contract kept rising after hitting the lowest level since June 2020 at 14,055 yuan/mt on September 23. SHFE lead reached a nearly three-month high at 16,330 yuan/mt in the overnight trading on September 20. In the intraday trading on September 21, the most traded SHFE lead contract closed 1.5% higher at 15,945 yuan/mt, up 1,890 yuan/mt or 13.4% from September 23.

SHANGHAI, Oct 22 (SMM) – The most traded SHFE lead contract kept rising after hitting the lowest level since June 2020 at 14,055 yuan/mt on September 23. SHFE lead reached a nearly three-month high at 16,330 yuan/mt in the overnight trading on September 20. In the intraday trading on September 21, the most traded SHFE lead contract closed 1.5% higher at 15,945 yuan/mt, up 1,890 yuan/mt or 13.4% from September 23.

LME lead reached a new high since June 2018 at $2,447/mt on October 20, and the lead stocks across LME-listed warehouses increased by 275 mt to 57,000 mt on October 21. The spot prices of SMM #1 lead ingot averaged 15,825 yuan/mt as of October 21, up 10.7% from September 23.

Jiyuan issued another notice of the production cut by about 30% due to the power rationing, and some smelters have planned to reduce the production slightly, but the reduction is limited. The secondary lea output is expected to increase as the environmental protection has been eased and the rebounding lead prices restored the profits of the secondary lead. Anhui and Henan are still under the power rationing, which is likely to affect the supply of the primary and secondary lead in the short term.

The domestic lead ingot inventory has been increasing since end-April, and keeps hitting the record highs since 2014. However, the inventory declined slightly in end-September as the overall reduction in the supply of the primary lead, secondary lead, and lead-acid battery was more significant than that in the consumption due to the losses, power rationing, and the environmental protection inspections. Social inventories of lead ingots across Shanghai, Guangdong, Zhejiang, Jiangsu and Tianjin totalled 193,900 mt as of October 19, down 22,100 mt or 11.4% from September 24.

SMM expects the coal and power shortage to extend in Q4, which may continue to affect the whole lead industry chain. In addition, the primary lead smelters will start intensive maintenance, which may slow down the inventory increase of lead ingots and support the lead prices. The lead prices in Q4 are expected to stand higher than that in Q3.

The downstream users are restocking on demand, and some lead-acid battery companies plan to ramp up the production in Q4. The consumption may grow further.

In the short term, the secondary lead smelters are willing to produce. Although the government’s control on the unreasonable rise in the coal prices has suppressed the ferrous and non-ferrous metals, the power rationing will continue to support the prices, and the lead prices are expected to stand high.

However, in the medium to long term, the new secondary lead capacities will be put into production, and the smelters production enthusiasm is high amid the high profits, which may cause the inventory pressure.

lead prices

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

For any inquiries or to learn more information, please contact: lemonzhao@smm.cn

For more information on how to access our research reports, please contact:service.en@smm.cn

Related News

4 hours ago

NPC Deputy Proposes Expanding Payment Regulation to Benefit More Automotive Suppliers

It was reported that during this year’s Two Sessions, NPC deputy Liu Changhai, Chairman of Camel Group, proposed expanding the scope of application of the Regulation on Ensuring Payment to Small and Medium-Sized Enterprises from small and medium-sized suppliers in the supply chains of large enterprises (mainly 17 key automakers) to above-designated-size enterprises in the automotive industry, thereby creating a “hard constraint on payment terms across the entire industry.” He also proposed clearly defining “completion of goods delivery and acceptance” as the period start point, and strictly prohibiting the disguised extension of payment terms through measures such as deliberately delaying acceptance and the non-compliant use of commercial bills of exchange.

4 hours ago

[Lead-Acid Battery Market] NPC Deputy Zhang Tianren Proposes Big Data Monitoring, Stricter Entry Rules

[Lead-Acid Battery Market Update] It was reported that during this year’s Two Sessions, Zhang Tianren, a deputy to the National People’s Congress and Chairman of Tianneng Holding Group, proposed that relevant national ministries and commissions leverage big data to monitor nationwide battery capacity, production, utilization rate, and market demand, and regularly release an overcapacity early-warning index to clearly restrict outdated technologies and inefficient capacity. He also proposed raising market entry thresholds for battery production and recycling, shifting from a “licensing” system to a national ministry “filing” system, further revising the “Standard Conditions for the Battery Industry,” and prohibiting low-level capacity from entering the market.

4 hours ago

8 hours ago

Data: SHFE, DCE market movement (Mar 04)

The following table shows the ferrous and nonferrous metals movement on the SHFE and DCE on 04 Mar , 2026

8 hours ago