[SMM Primary Lead Production] It is understood that national primary lead output rebounded significantly in July 2026, rising 7.44 percentage points MoM and 11.03 percentage points compared to the same period last year. Cumulative primary lead output in January-July 2026 increased 5.41 percentage points YoY, mainly driven by production resumptions after maintenance at lead smelters in southwest China, northeast China, and east China.

SMM, July 31: Views in the secondary refined lead market diverged further. Upstream suppliers held prices firm aggressively, while downstream enterprises called for price cuts and waited to purchase at lower levels. The price spread between secondary refined lead and primary lead narrowed, highlighting the purchasing advantage of primary lead. Price expectations between buyers and sellers differed widely, spot negotiations were at a stalemate, and overall market transactions remained sluggish. This week, mainstream transaction prices for secondary refined lead were at a discount of 75-0 yuan/mt against the SMM #1 lead average price. Meanwhile, scrap battery prices fell only slightly, widening the loss range for enterprises. As of July 31, 2026, the comprehensive theoretical profit/loss for large-scale secondary lead enterprises was -623 yuan/mt, while that for small and medium-sized secondary lead enterprises was -801 yuan/mt. If lead prices remain in the doldrums next week, the premium quotation range for spot orders of secondary refined lead against the SMM #1 lead average price will expand, and shipment volumes will continue to decline.

In the spot market, this week (July 27–31, 2026), SMM #1 lead prices continued to consolidate on a subdued note. The weekly average price fell 185 yuan/mt WoW, and the overall center moved lower. At month-end, downstream enterprises were less motivated to purchase, and some large enterprises met production needs solely through long-term contracts, with scant replenishment from spot orders. As lead prices dropped, maintenance and production cut plans among primary lead and secondary lead smelters increased, and suppliers' willingness to sell fell in tandem. In the spot market, transactions shifted from quotes at discounts to premiums compared to the start of the week. Specifically, mainstream electrolytic lead quotations were at premiums of 0–20 yuan/mt against the SMM #1 lead average price, ex-factory; secondary refined lead quotations were at premiums of 0–20 yuan/mt against the SMM #1 lead average price, with a few enterprises at a premium of 125 yuan/mt. The shift in the spot premium structure was mainly because smelters held back from selling at lower prices after the lead price fell, while suppliers actively shipped inventory to delivery warehouses, alleviating in-factory inventory pressure and tightening available supply in the market.

It is learned that as of July 30, the in-factory inventory of major primary lead delivery brands stood at 24,400 mt, a decrease of 5,900 mt WoW. This week, production at primary lead smelters remained stable with a slight increase, while downstream enterprises were cautious in purchasing, and spot lead was generally traded at a discount, with the spread between futures and spot prices around 150-200 yuan/mt. Some suppliers shifted inventories to delivery warehouses, helping to ease in-factory inventory pressure on smelters. Next week, as we enter August and a new round of futures delivery approaches, with lead prices continuing to consolidate at lows, suppliers will still mainly focus on hedging and delivery. It is expected that more in-factory lead ingots will be transferred to delivery warehouses.

It is learned that this week (July 24 – July 30, 2026), the combined operating rate of primary lead smelters in three provinces was 67.02%, an increase of 0.25 percentage points WoW. The operating rate of primary lead enterprises edged up slightly this week, mainly due to the resumption of normal production at a medium-sized lead smelter in Hunan. Next week, maintenance at some small and medium-sized enterprises in Yunnan is about to end, and their production recovery progress will be monitored; some smelters in Hunan will gradually enter maintenance, which is expected to bring a certain reduction. In addition, a smelter in Inner Mongolia also plans to conduct maintenance in late August. Attention will be paid to the subsequent maintenance and production resumption progress of primary lead smelters.

SMM July 31: As of July 30, secondary lead finished product inventories stood at 34,000 mt, up about 10,000 mt MoM. Imported crude lead traded in May arrived in a concentrated manner recently after a two-month shipping period, and smelters began refining processing, pushing finished product inventories significantly higher. Meanwhile, the price spread between secondary refined lead and primary lead continued to narrow, and downstream users prioritized purchasing primary lead, with secondary lead transactions remaining weak; compounded by lead prices consolidating on a weak note, smelters were trapped in losses and their willingness to sell proactively was low. SMM expects that secondary lead smelter inventories will stay high next week, but with expectations for industry production cuts, the room for further inventory buildup will be relatively limited.