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SMM April 2 News:
According to the latest data from SMM, the production activities of China's secondary lead enterprises increased significantly in March 2025, with production rising by approximately 200,000 mt. This growth was mainly driven by the increase in calendar days, favorable profit performance, and the resumption and ramp-up plans of multiple enterprises in March.
As shown in the figure below, the comprehensive profit and loss of secondary lead enterprises in March 2025 was mostly positive, leading to high production enthusiasm among enterprises. However, due to the high operating rate of secondary lead coinciding with the off-season for raw material supply, the high price of scrap batteries pushed up production costs. After the decline in lead prices at month-end, enterprise profits were somewhat affected. April is the off-season for lead-acid battery consumption, and some battery producers have holiday plans during the Qingming Festival, weakening the digestion capacity of lead ingots. The operating rate of secondary lead smelters may also decline accordingly.
Therefore, despite the significant increase in production in March, April's production is expected to experience an unexpected decline due to tight scrap supply. It is understood that no secondary lead smelter has proactively proposed a production cut plan, and enterprises generally stated that April production will be adjusted based on market conditions. SMM data shows that as of March 28, the weekly raw material inventory days of smelters were already about 2 days below the dynamic average.
Currently, lead prices are still on a downward trend, and secondary lead smelters have had to lower the purchase price of scrap batteries due to cost pressure. However, if recyclers do not accept this price, smelters will face the pressure of poor raw material arrivals and further inventory declines. In summary, in April, we need to pay attention to the impact of enterprise profits, raw material arrivals, and changes in the center of lead price movements on the production of secondary lead enterprises.
