Lead-acid battery peak season expectations are limited, lead prices continue to move sideways [SMM Lead Morning Meeting Summary]

Futures:

Overnight, LME lead opened at $1,988/mt, reaching a high of $1,995.5/mt during the Asian session before consolidating. In the European session, it fluctuated under pressure at $1,990/mt and then declined to a low of $1,982.5/mt. After a slight rebound, it finally closed at $1,985.5/mt, down $1.5/mt, or 0.08%.

Overnight, the most-traded SHFE lead 2510 contract opened at 16,885 yuan/mt, initially dropping to 16,865 yuan/mt, then rising to 16,910 yuan/mt. It subsequently consolidated around the daily moving average and closed at 16,875 yuan/mt, down 40 yuan/mt, or 0.24%.

On the macro front, the US imposed a 50% tariff on Indian products imported into the US, effective from the 27th. This is the highest tariff the US has levied on any Asian country, aimed at penalizing India for purchasing Russian oil, which undermines decades of efforts to build closer ties with India. Domestically, data from the National Bureau of Statistics (NBS) showed that in July, profits of industrial enterprises above designated size fell by 1.7% YoY, with the decline narrowing compared to June, marking two consecutive months of narrowing. The 2025 Shanghai Cooperation Organization summit is set to take place in Tianjin from August 31 to September 1. During the summit, leaders of member states will jointly sign and issue the "Tianjin Declaration" and approve the "SCO Development Strategy for the Next 10 Years."

Spot market fundamentals:

In the Shanghai market, Chihong and Honglu lead were quoted at premiums of 0~10 yuan/mt against the SHFE 2509 contract; in the Jiangsu and Zhejiang markets, Jijin and JCC lead were quoted at parity with the SHFE 2509 contract. SHFE lead maintained a high consolidation, with suppliers selling according to the market. A few offered premiums, while primary lead smelters were more active in selling, mostly offering discounts. Mainstream origin quotes ranged from a discount of 50 yuan/mt to a premium of 50 yuan/mt against the SMM #1 lead average price. Secondary refined lead smelters held firm on prices, with quotes ranging from a discount of 50 yuan/mt to a premium of 25 yuan/mt against the SMM #1 lead average price. With lead prices at a high level, downstream enterprises showed limited enthusiasm for purchases, with some continuing to buy long-term contracts and more spot orders being negotiated, but no significant improvement in transactions. Inventory: As of August 26, LME lead inventory decreased by 4,075 mt to 267,475 mt. As of August 25, the total social inventory of lead ingots in five regions tracked by SMM was 68,300 mt, down 2,700 mt from August 18 and 1,600 mt from August 21.

Today's lead price forecast:

The expected growth in the peak season for lead-acid batteries is relatively limited, with the main increase in consumption expected to come from e-bike replacement demand and the increased battery weight due to new standards. However, demand for automotive sector batteries is weak. In 2025, the export cost of lead-acid batteries may be lower than in previous years due to higher domestic raw material prices and tariffs. As the end of August approaches, the expected maintenance-related production cuts for delivery brand primary lead in September have not yet significantly materialized, while secondary refined lead has seen gradual minor production cuts. The supply of refined lead for this week is moderate, and it is anticipated that the supply of refined lead will decline as expected next week. In the short term, lead prices may be boosted by supply expectations and could test the 17,000 level, but consumption performance may put pressure on lead prices after they strengthen, and lead prices may continue to move sideways.

Data Source Statement: Apart from publicly available information, other data are derived from public information, market exchanges, and SMM's internal database model, processed by SMM for reference only and do not constitute decision-making advice.