SMM December 31:
Spot supply of secondary refined lead remained tight this week. Approaching the New Year holiday, market activity declined: suppliers generally held back from selling, with some actively widening discounts to promote transactions, while most suspended quotations and adopted a wait-and-see approach for the post-holiday market. Downstream battery enterprises' purchase willingness further weakened, also mainly adopting a wait-and-see stance. Current mainstream spot offers including tax and ex-works were at discounts of 150-0 yuan/mt against the SMM #1 lead average price. Supply side, some secondary lead enterprises in east China continued to face environmental protection-related controls, making it difficult to fully resume production in the short term, thus the tight supply pattern persisted. As downstream enterprises gradually resume operations after the holiday, just-in-time procurement is expected to rebound, and their purchase willingness for secondary refined lead is anticipated to strengthen. Against this backdrop, the widening of discounts in secondary refined lead quotations is expected to temporarily pause.
The price center of lead significantly moved down this week. Procurement offers for waste lead-acid batteries only followed with minor declines, leading to a WoW decrease in secondary lead smelters' profits. SMM data showed that as of December 26, 2025, the theoretical comprehensive profit/loss for large-scale secondary lead enterprises was 123 yuan/mt, while for small and medium-sized enterprises it was -89 yuan/mt (by-product revenues for tin and antimony are excluded from the model). Given the currently limited supply in the waste lead-acid battery market and suppliers' general willingness to sell, secondary lead smelters maintained raw material inventory only for just-in-time needs. SMM expects smelter costs to be more likely to rise than fall. Coupled with weak downstream lead consumption failing to support lead prices, the profit margin for secondary lead faces further compression.
》Subscribe to View SMM Metal Spot Historical Prices
