[SMM Cast Aluminum Alloy Morning Comment: Easing Costs and Sluggish Demand Keep Aluminum Alloy Prices in the Doldrums] Last Friday, the ADC12 market was generally in the doldrums. As aluminum prices weakened, cost support eased, and some enterprises actively lowered their quoted prices.

As the lead industry continues to develop, the supply imbalance in the raw material sector is intensifying. In terms of lead concentrates, the tight supply situation is worsening. Additionally, due to the historically relatively high prices of gold and silver, smelters' demand for high-grade lead concentrates has increased. Meanwhile, the domestic processing fees for lead concentrates have continued to hit new lows. In terms of scrap, according to the SMM survey, in recent years, the generation of scrap batteries has not matched the processing capacity for scrap batteries. The capacity of secondary lead is in a state of oversupply. In 2024, the new capacity of secondary lead continued to increase, while the domestic supply of scrap was limited. Moreover, there was a loss of scrap in exports. Coupled with the traditional off-season in the lead-acid battery market in the first half of the year, with battery scrap volumes at a low point for the year, the supply imbalance has intensified. To enable industry peers to have a clearer and more intuitive understanding of the global market distribution of lead ingot raw material industries, SMM, in collaboration with Zhejiang Gang Lianjie Logistics Technology Co., Ltd., is proud to launch the "2025 Global Lead Ingot Raw Material Enterprise Resource Distribution Map". After annotation and typesetting, it will be printed and distributed to upstream and downstream customers in the industry. It aims to provide an authoritative, comprehensive, and professional overview of the lead ingot raw material industry, establish a communication bridge between enterprises across the industry chain, break down information barriers between upstream and downstream sectors, and jointly promote the healthy and green development and upgrading of the lead industry. Zhejiang Gang Lianjie Logistics Technology Co., Ltd., is an AAAA-level comprehensive service logistics enterprise affiliated with the Ningbo Zhoushan Port Group system. It is a joint venture established by Zhejiang Seaport Logistics Group and Box Technology (Shenzhen) Co., Ltd. It has obtained China Quality Management System Certification, with the number: 00124Q37205ROM/3302, and is a state-controlled enterprise. Relying on the brand advantages of Ningbo Zhoushan Port, the company adheres to the principle of taking Ningbo Zhoushan Port as the main body and closely revolves around the strategic business layout of Ningbo Zhoushan Port to provide customers with modern and comprehensive logistics services. The company has opened an Anhui branch in 2023, established a Malaysian subsidiary, and will open a German subsidiary in Wilhelmshaven, Germany, by the end of 2024. Currently, the Thai company has completed its registration and is in further planning. The company can provide logistics services centered on Malaysia and Thailand, radiating to various Southeast Asian countries, including but not limited to door-to-door cargo pick-up, warehouse (warehousing and in-warehouse operations), ocean freight booking, import and export customs clearance, etc. In terms of business performance, the company has ranked first in import agency volume at Ningbo Port for two consecutive years (2023 and 2024) and first in non-ferrous metal agency volume at Ningbo Port. It has also been honored with the "Top Ten Import Freight Forwarding Enterprises" award for two consecutive years in 2023 and 2024. Domestically: In terms of import business, the company provides full-chain import logistics services, covering international multimodal transport, port customs clearance, bonded customs declaration, transportation, warehousing, etc., covering almost all bulk raw materials: such as non-ferrous metals, plastic pellets, agricultural and sideline products, pulp, grain, recycled materials, hazardous goods, cold chain, bulk cargo, petroleum and petrochemical products, food, minerals, etc. Overseas: Zhejiang Gang Lianjie (Malaysia) Logistics Technology Co., Ltd. (a subsidiary), located in Selangor, Malaysia, 20 kilometers away from Port Klang West, 23 kilometers away from Port Klang North, and 34 kilometers away from the Port Klang Bonded Free Trade Zone. It is mainly engaged in international freight forwarding for imports and exports, with Malaysia as the center to radiate throughout Southeast Asia, and carries out related businesses. Contact Information Chen Dong (Imports) 13901649539 Zhu Yong, Overseas Project Leader and General Manager of the Malaysian Subsidiary 18501669898 Chen Lei (Imports) 13857876948 Shi Qihao (Imports) 13777188184 Contact Person for SMM Map Co-production Tian Cheng 19521491689 tiancheng@smm.cn

Since April, the operating rate has declined by about 30 percentage points due to tight raw material supply, high costs, weak end-use consumption, and poor lead ingot sales. The low scrap volume of waste lead-acid batteries has led to scarce market supply and significant pressure on recyclers. Secondary lead smelters face tight scrap battery arrivals, low raw material inventories, and high purchase offers. Intense competition for raw materials and customer-specific price increases have further complicated the situation. Lead prices remained sideways during the week, with downstream battery producers showing a strong wait-and-see sentiment. Secondary lead smelters had low willingness to sell due to cost pressure, and the spot market for secondary refined lead was sluggish. As of May 16, the theoretical profit and loss value for large-scale secondary lead enterprises was -592 yuan/mt, and -820 yuan/mt for small- and medium-sized enterprises.

[SMM Analysis: Why Are Secondary Lead Smelters Facing Such Difficulties as Operating Rates Continue to Decline?] SMM News on May 16: According to SMM, the tight supply of raw materials for secondary lead has led to high costs, while weak end-use consumption has resulted in poor sales of lead ingots. The combined pressure of losses from these two factors is a key inhibitor of production enthusiasm among enterprises... As the current selling price of secondary lead is lower than the cost, losses are inevitable once sold; most enterprises would rather accumulate inventory than ship goods. Amidst the sentiment of "upstream sellers not selling and downstream buyers not buying," the trading activity in the spot order market for secondary refined lead is low.

The secondary lead industry is facing difficulties during the off-season for lead-acid battery consumption. Low scrap volumes due to reduced battery replacements, combined with intense competition among recyclers, create significant pressure for scrap dealers to collect waste batteries. Secondary lead smelters are struggling with poor arrivals of waste batteries and high costs, resulting in losses of 600-800 yuan per ton of secondary refined lead. High lead ingot inventories and weak demand from downstream battery manufacturers further exacerbate the situation. Despite plans for new capacity in May, production cuts are anticipated as the industry grapples with tight raw material supplies and declining output.

[SMM Analysis: Review of the Lead Market During the Labour Day Holiday and Market Outlook After the Holiday] SMM May 5 Report: Due to the Labour Day holiday, the Shanghai Futures Exchange suspended night session trading from April 30 onwards. From May 1 to 5, which was the holiday period, no trading took place for SHFE lead, and the domestic spot lead market also entered a state of suspended trading. However, the London Metal Exchange in overseas markets continued trading as usual...

[SMM Analysis: "Double Whammy" of Market Losses and Tight Raw Material Supply! Secondary Lead Production Declined in April. Can the Situation Be Turned Around in May?] SMM reported on April 30: In April 2025, the production of secondary crude lead declined, down 4.56% MoM and up 11.04% YoY; the production of secondary refined lead declined 4.26% MoM and increased 7.46% YoY.

Copper prices have recently experienced significant fluctuations, showing a trend of initial decline followed by a rebound. In early April, affected by the US's imposition of "reciprocal tariffs," the entire market was filled with anxiety, which significantly dragged down copper prices. Copper prices plummeted after the Qingming Festival, dropping to a low of 71,320 yuan/mt. After the market collectively vented its pessimism, it gradually returned to calm. Additionally, signs of easing emerged in the tariff war initiated by the US, causing copper prices to refocus on fundamental factors and gradually recover. Weakening Financial Attributes In April, global financial markets closely monitored the US tariff policy, experiencing two phases: a concentrated release of panic sentiment followed by its easing. In early April, affected by the US's "reciprocal tariff" policy, global stock markets suffered heavy losses. Risk-averse sentiment drove US Treasuries and the Japanese yen higher, while the non-ferrous metals sector weakened across the board. After the rapid release of market panic, on April 9, the US announced a temporary suspension of imposing high "reciprocal tariffs" on some trading partners. This led to significant gains in European and US stock markets, with the non-ferrous metals sector staging a broad-based rebound. By this point, most of the impact from the trade conflict had been absorbed by the market, and global markets gradually returned to calm. The US Fed will hold its interest rate-setting meeting in early May. The negative impact of the US tariff policy on the market has already weakened, but its influence on inflation and economic growth will continue to be reflected in US macroeconomic data. The macroeconomic environment in May is expected to remain stable overall, with its impact on copper prices likely to diminish. Tight Supply Recently, overseas mine operations have remained generally stable, with only sporadic disruptions. According to SMM, protesters in the Cusco region of Peru have blocked the entrance to Glencore's Antapaccay copper mine since March 30. Additionally, in mid-April, a worker at KGHM's Sierra Gorda copper mine in Chile died, halting mine production. Sierra Gorda's copper production in 2024 was 146,000 mt, with little actual impact on global copper concentrate production. Since March, there have been signs of easing in the copper concentrate supply environment. In mid-March, the Panamanian government indicated it would allow First Quantum to export 120,000 mt of copper concentrate and permit the restart of the power plant serving the mine. Freeport, which had not exported any copper concentrate this year, obtained an export quota of approximately 1.27 million mt of copper concentrate. Additionally, there is room for some production release from projects like Teck Resources' Quebrada Blanca Phase II and Oyu Tolgoi Phase II. For the week ending April 18, the processing fee for imported copper concentrates was reported at -$34.71/mt, down $3.82/mt WoW. The current level of processing fees for imported copper concentrates has remained negative for three consecutive months and continues to weaken. According to SMM's survey, some domestic smelters still have maintenance plans in May. Considering the potential impact of the downward shift in the copper price center on smelters' production enthusiasm, the tight supply situation for ore is expected to ease in May. Affected by the downward shift in the copper futures price center and suppliers of copper scrap raw materials holding back cargoes, the price spread between copper cathode and copper scrap narrowed significantly in April, even dropping to 450 yuan/mt in mid-April, the lowest level since late October 2023. The sharp decline in copper prices significantly reduced the sales volume of copper scrap suppliers. Copper anode production only saw slight increases from some secondary copper rod enterprises switching production. Copper anode production from ore is constrained by factors such as tight supply in the copper concentrate market and continuously falling spot TCs, making it difficult to significantly increase production. Currently, the impact of the foreign trade environment on copper scrap imports is gradually being reflected, with imported copper scrap volumes unlikely to rebound in April. Additionally, suppliers of copper scrap raw materials are holding back cargoes, waiting for copper prices to rise, which will exacerbate the tight supply of copper scrap in April. Although the processing fee for imported copper concentrates has remained negative, it has not significantly impacted smelter production. Although Tongling Nonferrous Metals announced maintenance in March, the operating rate of domestic copper smelters, as surveyed by SMM, has continued to rise, reaching 87.68% by the end of March. This is mainly due to factors such as high copper prices, as well as high prices for by-products like sulphuric acid and gold. The number of smelters planning maintenance in China in Q2 has significantly increased, with multiple smelters having maintenance plans from April to June. We estimate that the impact of maintenance on copper cathode production will be concentrated in April and May. Stable Consumption Boost The operating levels of copper cathode rod enterprises have been better than in the previous two years this year, mainly due to insufficient production of secondary copper rods rather than driven by growth in end-use demand. The rebound in terminal wire and cable consumption will be offset by high inventory levels in the copper rod industry, making it difficult for the consumption rebound to effectively form new and significant demand. The production and sales of the air conditioning industry exhibit distinct seasonal characteristics. May will mark the beginning of the downward cycle in air conditioning production, with air conditioning inventory likely to accumulate again at high levels. Therefore, copper demand from the air conditioning sector will experience a seasonal decline in May. May is a seasonally recovering period for the automotive industry. As trade-in subsidies for the automotive industry have been in place for several years, some demand has already been fulfilled in advance, and the actual boosting effect of consumption on production is expected to be relatively limited. Overall, driven by supply factors, copper prices are expected to continue their upward recovery in May. (Source: Futures Daily)

In April, China's Secondary Lead Market faces tight raw material supply and cost pressures. Despite no widespread proactive production cuts among Secondary Lead smelters, potential downstream holiday shutdowns and rising scrap battery prices may force passive output reductions. Lead prices are expected to remain under pressure in the short term.

【SMM Analysis: Raw Material Shortage, Operational Losses, and Downstream Holidays—The Tough Choices for Secondary Lead Smelters】SMM, April 17: Secondary lead smelters have not shown widespread voluntary production cuts, with only individual smelters in Jiangxi, Anhui, Zhejiang, and Hebei experiencing slight production declines two weeks ago. Some companies stated that production cuts would lead to increased production costs, while shutdowns would directly result in labour cost losses.