SMM, July 3: Scrap battery prices weakened this week, as lead ingot prices fell by a cumulative 200 yuan/mt in June, dragging down the average scrap battery price across regions. Secondary lead smelters remained loss-making and adopted a cautious approach to material purchasing. Early in the week, the decline in lead prices prompted recyclers to sell intensively, increasing arrivals in east and north China; later in the week, supply tightened and smelters did not raise purchase prices after lead prices rebounded, cooling recyclers’ willingness to sell. The terminal battery off-season kept operating rates low, while hazardous waste rectifications squeezed non-mainstream supply, leaving the short-term market mixed. Supply tightening and expectations of smelter production resumptions in July lent support, while smelting losses capped room for price hikes. Scrap battery prices are expected to remain stable in a narrow range, with a need to track lead prices and smelter resumption progress.

[Silicon Metal Market Stalemate, Prices Consolidate at Lows]: On the supply side, silicon metal production in June stood at 358,400 mt, up 8% MoM. In July, production ramp-up in Sichuan and Yunnan will become the main driver of supply growth, with July production expected to increase 9% MoM. The fundamental logic of both supply and demand growth and relatively heavy supply pressure remains unchanged. With no news disturbances from policy or macro liquidity, and in the absence of unexpected events, silicon metal prices continue to consolidate at lows.

SMM July 2: Overnight, the LME lead 3M contract opened at $1,870/mt. In early trading, prices repeatedly drifted lower, dipping to an intraday low of $1,853/mt. Subsequently, bearish selling pressure eased somewhat, and prices consolidated and rebounded. During the latter half of the evening session, the uptrend accelerated, and prices gradually rebounded, reaching a high of $1,881.5/mt. Near the close, prices pulled back under slight pressure and finally settled at $1,866.5/mt, forming a candlestick with a long lower shadow, down $5.5/mt, or 0.29%. Overnight, the SHFE lead 2608 contract opened at 15,895 yuan/mt. After a brief surge to 15,930 yuan/mt, bulls ran out of steam, and bears entered to press prices into a sustained retreat, touching a low of 15,795 yuan/mt. Finding slight support from small buy orders at the low, it rebounded modestly, currently trading at 15,810 yuan/mt, down 65 yuan/mt, or 0.41%. Trading volume expanded, and open interest increased slightly by 1,263 lots. The contract retreated after a rapid rise and exhibited overall weakness. LME lead inventories are high, Goldman Sachs keeps adding to bearish positions, and inflows of low-grade lead imports are dragging on SHFE lead. On the supply side, lead concentrates are in short supply, and TCs continue to fall in July; primary lead smelters that underwent maintenance will resume production in July and are expected to increase output by 20,000 mt. Secondary lead raw material supply is tight, scrap battery prices have fallen, and production resumption plans are highly dependent on lead prices. In July, the battery sector enters the off-season, with downstream users only making small, low-price trial purchases and no concentrated restocking. Lead prices are in the doldrums in the near term; they will only stop falling once downstream users make concentrated purchases and secondary lead production cuts materialize.

Futures: The overnight LME lead 3M contract opened at $1,870/mt, then drifted lower in the initial session, dipping to $1,853/mt during the day before bearish pressure eased and futures rebounded. In the latter part of the evening session, the rally accelerated, with prices gradually climbing to a high of $1,881.5/mt. Towards the close, futures pulled back under modest pressure to settle at $1,866.5/mt, forming a long lower shadow candlestick and losing $5.5/mt, a decline of 0.29%. The overnight SHFE lead 2608 contract opened at 15,895 yuan/mt. After a brief early spike to 15,930 yuan/mt, bulls lost momentum as bears entered to push prices lower, with the contract dropping to a low of 15,795 yuan/mt. Gaining some support from light buying at the lows, prices rebounded slightly and are now trading near 15,810 yuan/mt, down 65 yuan/mt, a decline of 0.41%. Trading volume expanded and open interest edged up by 1,263 lots, with the contract retreating after a rapid rise and showing overall weakness. On the macro front: Fed Chairman Warsh: Inflation expectations and inflation risks have both diminished in recent weeks. The US ADP employment change for June increased by less than expected. Warsh reportedly appointed a Bessent aide as a Fed advisor. Meta is reportedly considering selling surplus AI computing power. Wang Yi held a telephone call with US Secretary of State Rubio. An agent confirmed that MLCC giant Yageo raised prices. Spot Fundamentals: SHFE lead has recently suffered successive breakdowns, and losses widened again today, with suppliers holding prices firm on their cargoes—lead ingot cargoes in the Jiangsu, Zhejiang, and Shanghai regions were quoted at premiums. Meanwhile, the discount on EXW primary lead smelter cargoes narrowed. In major producing regions, quotations were near parity with the SMM #1 lead average price. For secondary lead, smelter losses deepened as lead prices fell, and some enterprises signaled potential production cuts or suspensions. Market quotes were scarce, with a few secondary refined lead offers at premiums of 0–75 yuan/mt against the SMM #1 lead average price. As the semi-annual liquidity squeeze eased in July, large downstream enterprises resumed normal procurement and showed marginally higher inquiry interest. However, given the sharp decline in lead prices, most downstream enterprises remained cautious, leaving market trading volumes subdued. Inventories: As of July 1, LME lead inventory decreased by 1,900 mt to 301,775 mt. As of June 29, SMM data showed total social inventory of lead ingots across five major domestic regions climbed to 71,200 mt, reaching a stage high since June, with visible inventory buildup pressure remaining pronounced. Lead Price Outlook Today: LME lead inventory remains elevated, while Goldman Sachs continues to add short positions, and inflows of low-grade lead imports are weighing on SHFE lead. Supply side, lead concentrate availability is tight, with July TCs extending their decline; primary lead smelters resuming production after maintenance are expected to add 20,000 mt of output in July. Secondary lead raw material supply is tight, scrap battery prices fall, and production resumption plans are highly dependent on lead prices. In July, batteries enter the consumption off-season, with downstream only making small tentative purchases at low prices, and there is no concentrated restocking. Lead prices are in the doldrums in the short term, and a stop in their decline will require downstream concentrated purchasing and the implementation of secondary lead production cuts.

SMM, June 18: This week, SMM #1 lead ingot prices fluctuated upward from early to mid-week, then came under pressure and pulled back near the weekend. Driven by tight raw material inventories and bullish sentiment on lead prices, a small number of secondary lead smelters slightly raised their purchase prices for scrap batteries, while most producers kept their offers flat with last week. The industry remained in losses, with enterprises unwilling to actively raise prices to source materials, and the market largely adopted a wait-and-see approach. With lead prices weak and downstream consumption sluggish, smelters, despite low raw material inventories, had no incentive to raise prices for restocking. The anti-decline property of scrap battery prices became evident, and smelters also held a wait-and-see stance on price adjustments during the lead price uptrend. Next week, with smelters simultaneously undergoing production cuts, shutdowns, and resumptions, demand for scrap battery feedstock is mixed between bullish and bearish factors, and scrap battery purchase prices are expected to remain stable in the near term.

SMM, June 18: Lead prices first rose then fell this week. At the beginning of the week, smelters showed clear divergence in shipments, with secondary refined lead quoted at discounts of 25 yuan/mt to premiums of 125 yuan/mt. Downstream battery plants digested inventories, weakening transactions. Mid-week, increased maintenance at smelters tightened supply, and mainstream quotations shifted to discounts of 50-0 yuan/mt. Towards the weekend, lead prices pulled back slightly, with the discount range remaining unchanged. Ahead of the Dragon Boat Festival, downstream users halted procurement early, with a strong wait-and-see sentiment prevailing. Spot transactions were sluggish throughout the week. Lead prices rose by 345 yuan/mt on a weekly basis. Downstream users turned wait-and-see before the Dragon Boat Festival, and transactions for secondary refined lead were subdued. Smelters' raw material inventories declined, but they were reluctant to raise purchase prices for feed, leaving scrap battery purchase prices basically stable. As of June 18, large secondary lead enterprises suffered losses of 395 yuan/mt, while small and medium-sized plants incurred losses of 597 yuan/mt, narrowing by 113-115 yuan/mt compared with June 12. Looking ahead, with both production increases and cuts coexisting among secondary smelters, the quotation range for refined lead is expected to remain between discounts of 50 yuan/mt and premiums of 50 yuan/mt. Currently, low raw material inventories at smelters underpin scrap battery prices, but raising purchase prices for feed would exacerbate losses. Purchase prices are expected to remain predominantly stable. With weak finished product prices and high costs, the industry's loss-making situation is unlikely to improve in the short term, with small and medium-sized plants suffering more severe losses.

SMM June 12 news: This week, SMM #1 lead ingot (tax-inclusive) fluctuated downward, briefly rebounded mid-week, and then declined again, leading to a weekly loss of 200 yuan/mt. The tax-inclusive scrap battery purchase price was cut by 150 yuan/mt early in the week and then held steady, showing relatively firm performance, mainly due to smelters’ raw material procurement difficulties and declining raw material inventory. Looking ahead to next week, the pace of production resumptions at smelters varies; some enterprises have delayed resumption, while others plan to reduce or halt production due to raw material issues. Currently, purchase prices at recycling storefronts are falling in line with procurement prices, and storefronts are holding back from selling; coupled with concentrated sell-offs of cargo during the previous lead price decline, circulating raw material supply is tight. The scrap battery purchase price is expected to remain stable in the short term.

SMM June 12 news: During June 5-11, 2026, the weekly operating rate of secondary lead in four provinces tracked by SMM stood at 29.7%, up 1.31 percentage points WoW. Some smelters in Anhui cut production due to losses and tight raw material supply, while large smelters resumed production and ramped up, offsetting the reduction and lifting the regional operating rate by 2.39 percentage points. The sharp drop in lead prices drove down scrap battery prices and boosted circulation; after restocking raw materials, Henan smelters raised production, while enterprises in Jiangsu cut production due to losses. Next week, small smelters in Inner Mongolia plan to resume production, and the regional operating rate is expected to increase by 3.41 percentage points. Other enterprises will adjust production based on changes in raw materials and lead prices.

[Bullish Sentiment Prevailed in the Market This Week, with Solid Support for the Silicon Metal Bottom]: On the supply side, operating rates at northern silicon enterprises were basically stable, while those in Sichuan and Yunnan slowly improved. However, the pace of overall supply release was limited, with insufficient incremental elasticity. Combined with demand side keeping pace, supply and demand in the industry were broadly balanced recently. Recently, bullish sentiment dominated the market, providing strong support for the silicon metal bottom. Silicon metal prices were constrained in both upside and downside room and may continue to move sideways within a narrow range. Watch for fluctuations in macro expectations and changes in the PV industry, which may cause marginal disturbance to silicon metal.

[SMM Analysis] Lead Prices Plunge to 27-Month Low – Is the 16,000 "Lifeline" About to Break? SMM June 9 News: As of the close at 11:30 a.m. today, the main SHFE lead contract 2607 was reported at 16,070 yuan/mt, down 305 yuan/mt, a decline of 1.86%, hitting an intraday low of 16,055 yuan/mt, the lowest since March 8, 2024.