Tariff incident continues to affect non-ferrous metals; lead ingot consumption capacity in May may limit its imports [SMM Analysis]

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SMM May 20 Report:

In April 2025, the global lead market was influenced by multiple factors, including macroeconomic conditions, trade policies, and the supply-demand relationship. According to customs data, in April 2025, China's refined lead exports reached 3,368 mt, up 19.09% MoM and 15.54% YoY. From January to April, the combined exports of refined lead and lead products totaled 22,286 mt, up 7.88% YoY. In terms of imports, China's refined lead imports in April were 4,734 mt, and lead alloy imports were 8,576 mt. From January to April, the combined imports of refined lead and lead products reached 47,207 mt, up 207.89% YoY.

In March, as lead-acid battery enterprises resumed normal production, the demand for lead ingot purchases increased simultaneously. During this period, the import window for lead ingots briefly opened, with some imported crude lead flowing into the domestic market, pushing lead supply to its highest level in a year and a half. This phase saw the recovery of market demand and the increase in imported supply jointly driving the activity in the lead market. In April, the US tariff hike became a key factor affecting the lead market. On April 2, US President Trump signed two executive orders on "reciprocal tariffs," announcing a 10% "minimum benchmark tariff" on trading partners, which took effect at 00:01 AM EST on April 5. The US imposed a 34% reciprocal tariff on China, and a 25% tariff on automobiles took effect on April 3. Following the announcement, bearish sentiment surged in the market, with non-ferrous metals generally weakening, and the price center of lead gradually shifting downward. During this period, the import window for lead ingots opened again, with crude lead supplies flowing into the domestic market ahead of refined lead, further complicating the market.

Entering May, the weakness in both macro and fundamental factors continued to drag lead prices into a doldrums, though the price range narrowed compared to April. Overseas LME lead inventory continued to destock for nearly half a month, indicating ongoing support for lead demand in the international market. The domestic supply side tightened, primarily due to further expansion of losses in the secondary lead sector, coupled with prominent scrap supply issues, leading to an increase in the number of smelters reducing or halting production. Domestic secondary lead circulation was limited, with secondary crude lead quotes remaining firm, and prices inverted against refined lead for an extended period. Some traders continued to attempt quoting domestic manufacturers (with transactions concluded before procurement). After the recent opening of the import window, some domestic secondary lead smelters reported that traders' quotes for self pick-up at ports were at a discount of 200 yuan/mt against the SMM 1# lead average price, with transactions already concluded.

On the consumption side, the lead-acid battery market remained in the off-season. During the Labour Day holiday, downstream enterprises generally took time off, leading to a lack of lead consumption. The impact of the US tariff hikes intensified, causing a decline in orders for some export-oriented battery enterprises and further dragging down lead consumption. Downstream procurement volume shrank again in May. Despite the inflow of lead ingots into the country, their imports in May may be limited due to weak digestion capacity.

In 2025, under the dual influence of changes in the macroeconomic environment and trade policies, the lead market exhibited complex supply-demand and price trends. Market dynamics from March to May indicated that the supply-demand relationship in the lead market was comprehensively affected by multiple factors, including import supply, losses in the secondary lead sector, trade policies, and the off-season in consumption. In the future, the lead market will continue to be influenced by the macroeconomic situation, trade policies, and changes in industry supply and demand. Market participants need to closely monitor relevant policy developments and market supply-demand changes to make reasonable decisions.