Chinese New Year Approaching: Trading Dynamics of the Lead Industry Chain [SMM Analysis]

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SMM, January 17:

As the Chinese New Year atmosphere intensifies, trading activity among upstream and downstream enterprises in the lead industry chain has significantly declined. Supply side, battery scrap recyclers indicated that store prices are expected to rise after the holiday, leading to a reluctance to sell; coupled with the already limited market supply, this has created some pressure on purchases. Mainstream store quotes for battery scrap have shown little fluctuation recently, tending to remain stable.

Since most secondary lead smelters nationwide are either preparing for shutdowns or have already ceased operations, and many smelters intend to stock up raw materials before resuming production after the holiday, the activity in the battery scrap market has already declined at this stage.

The plastic market is also mediocre, with the transaction performance of battery scrap casing fragments in south China slightly better than in north China. According to a secondary lead smelter in central China, the self pick-up prices including tax are as follows: Green S at 6,000 yuan/mt, Black S at 4,650 yuan/mt, Large Gray-White ABS at 5,150 yuan/mt including tax, White PP at 6,300 yuan/mt, and Black PP at 6,000 yuan/mt.

Demand side, downstream battery producers have generally started their holidays earlier, with most expected to halt production around January 20. According to market sources, a major battery producer's Jiangsu production site has largely ceased operations for the holiday, while its Anhui production site will stop in a few days. After the holiday, there is an expectation of significant lead ingot procurement, and this news has already impacted lead prices this past Friday, with the most-traded SHFE lead contract rebounding as shorts reduced positions. Additionally, some small and medium-sized battery producers indicated that they still have minor just-in-time procurement plans before the holiday and are closely monitoring lead price trends before January 25.