Will Higher SHFE/LME Lead Price Ratio Increase Lead Ingot Imports in May? [SMM Data]

According to customs data, in April 2024, refined lead exports were 2,915 mt, down 32.36% MoM, down 50.61% YoY; from January to April, cumulative exports of refined lead and lead materials were 20,659 mt, down 63.55% YoY. In April 2024, refined lead imports were 132 mt; from January to April, cumulative imports of refined lead and lead materials were 15,332 mt, down 4.42% YoY.

In April, LME lead prices rose, reaching a monthly high of $2,245/mt near the end of the month, a monthly increase of 7.83%. Domestically, due to changes in the delivery standards under national standards for lead ingots, market concerns about insufficient warehouse receipts arose. After the "reverse invoicing" policy for scrap batteries was issued in mid-to-late April, scrap supply shortages led to unexpected production cuts by secondary lead enterprises, resulting in lead prices rising during the off-season.

By the end of the month, the most-traded SHFE 2406 lead contract reached a high of 17,475 yuan/mt, the highest since March 5, 2019, with a monthly increase of 4.02%. Refined lead export volumes in April were relatively limited. However, in May, the SHFE/LME ratio expanded, and conditions for importing lead-related products were acceptable. SMM expects lead ingot imports to increase significantly in May compared to April.