[SMM Social Inventory of Lead Ingots: New Capacity of Secondary Lead Put into Operation, Social Inventory of Lead Ingots Continues to Increase] Recently, the off-season trend in the lead-acid battery market remains unchanged, with most downstream enterprises in a state of production cuts, resulting in limited demand for lead ingots. Meanwhile, the production of primary lead enterprises remains stable. Coupled with a slight improvement in the profits of secondary lead enterprises, new capacity of secondary lead enterprises in Hunan and Guizhou provinces has been put into operation, leading to a steady increase in supply...

[SMM Lead Midday Review: Poor Trading of Refined Lead with Large Discounts, No Interest in High Premium Quotations] SMM reported on May 19: Today, the SMM 1# lead average price fell by 50 yuan/mt from last Friday to 16,725 yuan/mt, with a price difference between primary metal and scrap of 50 yuan/mt. Following the decline in lead prices, the willingness to sell among secondary lead suppliers continued to decline. During the morning session, the mainstream ex-factory tax-inclusive quotations were offered at a discount to parity against the SMM 1# lead average price, with individual quotations offered at a premium of 75 yuan/mt.

On Friday evening, LME copper opened at $9,519/mt, initially touching a high of $9,541.5/mt before slightly pulling back and then continuing to rise.

[SMM Lead Morning Meeting Summary: The Largest Bearish Factor Still Exists, Lead Prices Encounter Resistance or May Maintain Sideways Movement] On the demand side, there has been relatively small change in the production of lead-acid battery enterprises. Most enterprises primarily purchase through long-term contracts. The current off-season trend in the lead-acid battery market remains unchanged, still representing the largest bearish factor. On the primary lead side, production at enterprises has been relatively stable. Due to the SHFE lead delivery factors last week, in-plant inventory has been reduced (including simple transfers). Suppliers have no intention of further expanding discounts for shipments, and the level of spot discounts is expected to remain stable. On the secondary lead side, as lead prices rebound, losses in secondary lead have slightly recovered, with some enterprises intending to resume production. Coupled with the commissioning of new capacity, the discount level for secondary refined lead may expand again.

Since April, the operating rate has declined by about 30 percentage points due to tight raw material supply, high costs, weak end-use consumption, and poor lead ingot sales. The low scrap volume of waste lead-acid batteries has led to scarce market supply and significant pressure on recyclers. Secondary lead smelters face tight scrap battery arrivals, low raw material inventories, and high purchase offers. Intense competition for raw materials and customer-specific price increases have further complicated the situation. Lead prices remained sideways during the week, with downstream battery producers showing a strong wait-and-see sentiment. Secondary lead smelters had low willingness to sell due to cost pressure, and the spot market for secondary refined lead was sluggish. As of May 16, the theoretical profit and loss value for large-scale secondary lead enterprises was -592 yuan/mt, and -820 yuan/mt for small- and medium-sized enterprises.