Weak supply and demand continue, SHFE lead fluctuates rangebound [SHFE lead closing comment]

SHFE lead continued to fluctuate rangebound during the day, closing up 0.27%. Recently, there has been an increase in maintenance activities at secondary lead enterprises, and the supply side remains constrained. However, the downstream sector is also in the off-season, with both supply and demand remaining weak, leading to SHFE lead fluctuating rangebound.

Recently, scrap battery prices have strengthened again, and the high cost side has increased production pressure on secondary lead enterprises, leading to an expansion in the scope of production cuts and suspensions. For primary lead, there have been both maintenance activities and production resumptions. Production in May is expected to increase slightly. Regarding the supply side, COFCO Futures stated that due to poor profits in primary lead, weekly operating rates can basically be maintained, but transactions are relatively sluggish, with a significant accumulation of in-plant inventory. Primary lead production in May may increase slightly. Before the holiday, there was a sell-off and concentrated arrivals of scrap batteries, with a slight improvement in the availability of secondary raw materials on a WoW basis. However, the market still perceives a very limited supply. After the holiday, scrap battery prices have rebounded slightly. Due to significant losses in secondary lead production, weekly operating rates and production have declined significantly. However, spot order transactions have been poor, and while operating rates have fallen, finished product inventories have accumulated slightly. Secondary lead production in May is expected to decrease significantly.

Yide Futures stated that the off-season trend in lead consumption is difficult to reverse, coupled with export obstacles, leading to limited demand for lead ingots from downstream enterprises. Consumption remains a drag on lead price movements.