SMM Outlook: Lead Prices Rebound in a V-Shape in November

SHANGHAI, Dec 1 (SMM) - Lead prices have fluctuated greatly since Q3. After continuously experiencing sharp decrease in August and September, lead prices have just ushered in a turnaround in October, but trended lower in November. As of November 30, the most-traded SHFE lead contract closed at 15,340 yuan/mt, down 2.17%.

The overall supply is expected to increase amid maintenance and recovery in November. But the market supply diverged among regions due to maintenance of many delivery brands in the main production area. The operating rates of secondary lead keep rising in the first three months of November amid the end of power rationing in Anhui and maintenance of sme companies. However, the output of secondary lead has dropped significantly approaching the end of the month due to the overhaul of some smelters and the inspection of the regional solid waste centre.

The consumption of lead-acid battery was modest in November and the operating rates rose significantly at the end of November. Lead-acid consumption has gradually recovered amid the easing of COVID in Southeast Asian market. The export orders of automobiles and UPS have improved while downstream battery plants maintained stable restocking demand.

Lead ingots supply will gradually recover in December amid the easing of power rationing and the end of maintenance of equipment at some smelters. Lead ingot exports are likely to remain high and domestic lead ingot stocks are unlikely to accumulate for the time being.

Lead prices are expected to fluctuate strongly. The funds collection by companies at the end of year remains as the market focus.