In June 2026, the operating rate of secondary copper rod was 14.04%, below expectations of 14.23%, down 0.66 percentage points MoM and down 19.57 percentage points YoY. In June, the secondary copper rod market operated under three main themes: the full-scale implementation of reverse invoicing compliance inspections, copper prices repeatedly testing the 100,000 mark, and the early timing of the Dragon Boat Festival holiday

[Resumption recovery, operating rates of galvanising producers rise]: This week's operating rate of galvanising producers was 54.56%, up 3.03 percentage points WoW. Raw material side, zinc prices rebounded this week. Downstream players primarily stayed on the sidelines, mainly picking up previously priced zinc ingots, while zinc ingot inventories at galvanising enterprises edged up. The operating rate rebound was mainly because some galvanising plants were closed for the Dragon Boat Festival last week, causing a sharp decline in operations, while this week they all resumed normal production, pushing the rate back up.

It is understood that the weekly composite operating rate of lead-acid battery enterprises across five provinces tracked by SMM from June 26 to July 2, 2026, stood at 64.1%, up 7.24 percentage points WoW. The gradual resumption of normal production by major lead-acid battery enterprises after the Dragon Boat Festival holiday was the main factor behind the rebound in the weekly operating rate. Notably, e-bike and automotive battery markets remained in the traditional off-season. Some lead-acid battery enterprises noted that battery orders in July further declined MoM from June, causing factory production not to fully recover to pre-holiday levels. If subsequent orders continue to weaken, further cuts to production line operating rates cannot be ruled out.

[Enterprises Gradually Resume Normal Production, Die-Casting Zinc Alloy Operating Rate Rises] The operating rate rise this week was mainly because enterprises that had suspended production due to the Dragon Boat Festival holiday last week gradually resumed normal production this week, thus driving the operating rate higher. However, end-user orders were fundamentally weak. ......

According to SMM, the weekly combined operating rate of lead-acid battery enterprises across five provinces stood at 56.86% during June 19–25, 2026, down 9.96 percentage points WoW. The week coincided with the Dragon Boat Festival holiday. Starting from the previous Friday (June 12), some lead-acid battery enterprises began their holiday, with breaks ranging from 1–2 days to 3 days, and a few even extended the leave to 5 days, dragging down the weekly operating rate for that week. Next week, as the holiday factor fades and July is about to begin, those enterprises that had been on holiday will resume normal production, driving the weekly operating rate to rebound. It is also worth noting that the off-season trend in the lead-acid battery market has not improved significantly so far. Producers’ orders remain weak, and most enterprises plan to maintain production cuts, staying cautious about lead-acid battery demand in July.

[Off-Season Shadow Looms, Galvanising Operating Rate Continues to Weaken]: The operating rate of the galvanising industry this week was 51.53%, down 5.18 ppts WoW. Raw material side, zinc prices pulled back to a more acceptable level for downstream users this week, and downstream users restocked heavily via price fixing. However, cargo pick-up was relatively slow, and zinc ingot inventory at galvanising enterprises edged up.

[Dragon Boat Festival Holiday Enterprise Shutdowns Lower Die-Casting Zinc Alloy Operating Rates] The decline in operating rates this week was mainly due to some enterprises having a holiday for the Dragon Boat Festival, which caused a significant drop in operations. ......

The most-traded HRC contract closed at 3,312 today, down 0.45% for the day. Spot side, hot-rolled prices were stable to down 10-20 yuan/mt, cold-rolled prices held steady, and overall trading was weak. Today's weekly HRC balance data showed: Supply side, the impact from maintenance increased this week, and production edged lower. Demand side, affected by the Dragon Boat Festival holiday and deepening off-season, demand fell noticeably this week. Inventory side, SMM data showed HRC social inventory across 86 warehouses nationwide at 4.2912 million mt this week, up 64,500 mt, or 1.53% WoW, and up 39.78% YoY based on the lunar calendar. By region, the inventory buildup was larger in northeast China, central China, and north China than in east China, while south China saw slight destocking. Looking ahead, the supply-demand imbalance for sheets & plates is starting to accumulate, but the market expects more rounds of price increases after the 9th coke increase is implemented. Cost support from sheets & plates makes it hard for prices to fall sharply. In the near term, prices are expected to remain in the doldrums, with a floor support at 3,280.

The most-traded HRC contract closed at 3,325 today, slipping 0.03% throughout the day. Spot side, HRC prices firmed, edging up 10 yuan/mt, while CRC prices remained flat, with overall trading on the weak side. City-level HRC inventory data was released today. Zhangjiagang, Ningbo, and Lecong continued destocking, but the pace of destocking slowed down, while Shanghai and Tangshan experienced inventory buildup. City inventory trends diverged. Due to the Dragon Boat Festival holiday, a temporary, modest buildup in HRC social inventory is expected this week. Going forward, impacted by the Dragon Boat Festival holiday and the failure of demand to rebound post-holiday, the fundamental pressure on sheets & plates is emerging. However, with market talk of coke initiating a ninth round of increase, cost support for sheets & plates prices still holds. In the near term, plates & sheets prices are projected to remain in the doldrums.

SMM June 23: The most-traded SHFE lead 2608 contract opened at 16,420 yuan/mt during the day. In the morning session, prices fluctuated slightly around the intraday moving average, then weakened and fluctuated downward, dipping to an intraday low of 16,315 yuan/mt. In the afternoon, futures gradually recovered and rebounded, with prices steadily approaching the average line. Near the end of the session, the contract moved sideways in a narrow range of 16,370–16,400 yuan/mt and finally settled at 16,385 yuan/mt, recording a small bearish candlestick, down 65 yuan/mt or 0.4%. The SHFE lead 2607 contract recorded a trading volume of 29,824 lots and open interest of 43,541 lots. The SHFE lead 2608 contract recorded a trading volume of 31,280 lots and open interest of 69,530 lots. The most-traded SHFE lead contract officially rolled over to the 2608 contract. Currently, primary and secondary lead smelters in China are entering a concentrated maintenance period, creating strong market expectations of a contraction in lead raw material supply, which provides upward support to the futures market. After the Dragon Boat Festival holiday, downstream battery factories have gradually resumed production, generating short-term restocking demand driven by rigid needs. However, at the mid-year period, large downstream battery enterprises are entering the semi-annual financial closing and inventory check phase, which will temporarily slow down their concentrated procurement of lead ingots. The bullish impetus from rigid demand is relatively limited. The weak supply-demand situation makes it difficult to persistently boost lead prices upward. Lead prices are expected to remain in the doldrums in the short term. Data source statement: All data, except publicly available information, are processed by SMM based on public information, market communications, and SMM's internal database models. They are for reference only and do not constitute investment advice.