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.

[SMM Analysis: Why Are Secondary Lead Smelters Facing Such Difficulties as Operating Rates Continue to Decline?] SMM News on May 16: According to SMM, the tight supply of raw materials for secondary lead has led to high costs, while weak end-use consumption has resulted in poor sales of lead ingots. The combined pressure of losses from these two factors is a key inhibitor of production enthusiasm among enterprises... As the current selling price of secondary lead is lower than the cost, losses are inevitable once sold; most enterprises would rather accumulate inventory than ship goods. Amidst the sentiment of "upstream sellers not selling and downstream buyers not buying," the trading activity in the spot order market for secondary refined lead is low.