As September comes to a close, the National Day holiday will officially begin next Tuesday. Currently, the spot market activity has gradually declined. Compared to previous years, the pre-holiday stocking sentiment in 2024 is notably weak, whether it's downstream battery producers purchasing lead ingots or secondary lead smelters buying battery scrap.
Recently, battery scrap prices have remained relatively stable, and smelters are cautiously stocking based on production needs, with little increase in purchase quotes.
According to SMM data, the raw material inventory of secondary lead smelters in 2024 is significantly lower than in previous years, which aligns with the current operating conditions of these smelters.
Since the lead price focus shifted downward in August, the profitability of secondary lead smelters has plummeted, with many smelters reducing or halting production; some have yet to resume operations.
Currently, secondary lead smelters are mostly operating at low production levels, with the industry's monthly operating rate below 50%. Although there are no new maintenance plans reported during the National Day holiday, it is noteworthy that downstream battery producers generally take a 3-5 day break during the holiday. Upon returning, smelters will inevitably face finished product inventory accumulation, and we need to be wary of the impact of this inventory pressure on the production status of secondary lead smelters.
If the consumption of lead-acid batteries improves after the holiday, and the new battery finished product inventories of downstream enterprises decrease significantly, the demand for lead ingots will rise, quickly relieving the inventory pressure on secondary lead smelters. This could even drive up lead prices, encouraging halted enterprises to resume production swiftly. Conversely, the production situation of secondary lead smelters in October may not be optimistic.
