RECENT SHORTAGE IN THE REMELTED LEAD MARKET: SOUTH EAST ASIAN COUNTRIES AND INDIA RAISE ALARMS AS MARKET DYNAMICS TURN HIGHLY VOLATILE
Three weeks ago until now, the shortage of remelted lead in domestic SEA countries has become significantly more severe. According to SMM’s internal survey, smelters in Malaysia, Vietnam, and India are unable to secure remelted lead to produce refined lead of 99.99% and 99.97%.
This tight supply of remelted lead is pushing both domestic and international trading prices of refined lead higher across the mentioned-above regions.
WHAT IS CAUSING THE “REMELTED-LEAD-HUNTING” SITUATION ACROSS SEA COUNTRIES AND INDIA?
Buyout of Remelted Lead by Chinese Smelters
Current domestic trading prices of remelted lead in China have remained high over the past two months. This has opened an import window for lower-priced materials from neighboring countries. From SMM’s internal survey, Chinese smelters are now offering higher prices to purchase remelted lead from nearby countries that local companies can hardly afford.
The Basel Convention restricts imports of waste lead-acid batteries, worsening already weak domestic raw material supply.
Currently, domestic waste lead-acid batteries can only support small portion of materials for national refined lead production. Due to restrictions on importing waste batteries, most SEA smelters are seeking overseas remelted lead sources; however, these supplies are largely being purchased by Chinese smelters.
The shortage of materials in these SEA countries is further compounded by recent national protection over national strategic ore. As a result, the supply of refined lead raw materials is becoming increasingly tight on a daily basis, leading to an extreme shortage situation.
Hormuz Strait Closure Adds Pressure on India’s Remelted Lead Supply
India, which relies on scrap and remelted lead imports from the Middle East, faces additional supply pressure following disruptions in the Hormuz Strait. The recent geopolitical tensions have further weakened expectations of stable remelted lead supply.
SUMMARY AND MARKET OUTLOOK
To sum up, the "tight supply situation" in the SEA and India remelted lead market is expected to persist in the mid to long-term.
Remarks: Remelted lead sometimes more expensive than refined lead because it contains antimony and tin. The final price also depends on contract terms and negotiations.
At this critical stage, where remelted lead prices are approaching levels similar to refined lead prices, identifying effective solutions to procure remelted lead at favorable tax rates or securing authorization to import scrap lead batteries is worth-considering for the long-term strategies of refined lead producers.
This is an ongoing issue and requires further analysis to better forecast the continual phenomenon. SMM will continue to monitor the situation and gather more comprehensive data in the coming period.
