Imported Lead Disrupts Domestic Balance, Next Week's Lead Prices to Watch Cost Support [SMM Weekly Lead Market Forecast]

Published: Mar 21, 2025 17:26

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SMM March 21 News: Next week, key macroeconomic data will include the preliminary Eurozone Manufacturing PMI for March, the US Core PCE Price Index for February, and the winning rate of China's medium-term lending facility (MLF) as of March 25. Additionally, US and Russian officials will hold talks on the Ukraine issue, the Boao Forum for Asia is set to take place, and attention should be paid to the developments regarding the US imposing additional tariffs.

LME lead, LME lead inventory reversed its downward trend this week, surging by 27,000 mt, which dragged LME lead to jump initially and then pull back. After LME lead pulled back, the LME lead 0-3 contango widened to -23.06 $/mt, with subsequent focus on the effectiveness of support at the $2,000 level. It is expected that next week LME lead will trade between $2,000-2,070/mt.

Domestically, after the delivery of the SHFE lead 2503 contract was completed, the pace of lead ingot transfer to delivery warehouses may slow down, reducing its impact on lead prices. Imported lead has been arriving and entering the spot market, injecting new supply sources into the lead market. Following the domestic lead price's initial jump and subsequent pullback, the supply imbalance in the scrap battery market intensified, leading to a significant shrinkage in smelting profits, or even turning profitable operations into losses, potentially providing some cost support for lead prices. The most-traded SHFE lead contract is expected to trade between 17,100-17,650 yuan/mt next week.

Spot price forecast: 17,150-17,400 yuan/mt. On the supply side, production of both primary and secondary lead decreased, especially with maintenance at delivery brand enterprises, resulting in reduced lead ingot supply from major production areas, and smelters are likely to stand firm on quotes. In the secondary lead market, there might be a divergence; on one hand, due to high scrap battery prices, cost factors force smelters to stand firm on quotes, while on the other hand, some companies receiving imported crude lead can continue to sell at a large discount. On the demand side, lead-acid battery manufacturers' production remains relatively stable, and after the decline in lead prices, some companies may engage in buying the dip.

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.

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