SMM May 8 update: The most-traded SHFE lead 2606 contract opened at 16,770 yuan/mt intraday. At the beginning of the session, SHFE lead prices moved sideways within the range of 16,750-16,785 yuan/mt. Subsequently, dragged down by lead ingot inventory buildup, prices fluctuated downward, hitting an intraday low of 16,610 yuan/mt. Prices rebounded slightly toward the close, ultimately settling at 16,710 yuan/mt, down 110 yuan/mt or 0.65%, recording a small bearish candlestick. Sentiment side, geopolitical tensions outside China resurfaced, tightening the macro atmosphere and driving non-ferrous metals overall under pressure to pull back. Fundamentals side, production cuts and shutdowns at secondary lead smelters expanded in scope, but the lead-acid battery industry entered the traditional consumption off-season, with supply and demand weakening simultaneously. Lead ingot inventory continued to accumulate after the holiday, making it difficult to provide effective support for lead prices. In the short term, lead prices are expected to continue their pullback, giving back part of the earlier gains. Data source disclaimer: Data other than public information is derived from public information, market communication, and SMM's internal database models, processed by SMM for reference only and does not constitute decision-making advice.

According to SMM research, from May 1 to May 7, 2026, the weekly comprehensive operating rate of lead-acid battery enterprises across five provinces was 50.56%, down 14.94 percentage points WoW. This week coincided with the Labour Day holiday, during which lead-acid battery enterprises generally halted production for the holiday. Moreover, as the market is currently in the traditional off-season, some enterprises began their holidays early at the end of April, with factory shutdowns lasting 5–7 days, while most other enterprises took 2–5 days off, dragging down the weekly operating rate of lead-acid batteries further. Next week, as the holiday factor dissipates, most enterprises will resume normal production. However, since off-season conditions persist, some enterprises will operate at lower rates than in April after resuming production, and therefore the operating rate may struggle to return to pre-holiday levels.

Next week, key macroeconomic data releases include China's April CPI YoY, US April non-seasonally adjusted CPI YoY, and US April retail sales MoM. Additionally, US-Iran peace talks have been fraught with twists and turns—Iranian media claimed the US violated the ceasefire agreement, Iranian armed forces struck US warships, and talks are currently stalled, posing significant macro uncertainty risks. LME lead side, ex-China lead ingot inventory continued to decline, while the LME Cash-3M spread maintained a slight contango, with another "one-day" backwardation structure appearing during the week. Combined with the persistently tight spot market supply in Southeast Asia, LME lead is expected to hold up well. Furthermore, uncertainty surrounding ex-China geopolitical factors remains high, and their market impact warrants continued attention. LME lead is expected to trade within $1,950-2,000/mt next week. SHFE lead side, next week the SHFE lead 2605 contract enters delivery, with more suppliers shipping to delivery warehouses. Lead ingots will transfer from factory warehouses to social warehouses, and the continued buildup in visible lead ingot inventory will keep dragging on lead prices. Meanwhile, concentrated production cuts and shutdowns among secondary lead enterprises have become the main driver of supply reduction this month. Additionally, the closure of the import window and secondary lead losses provide price support. After delivery-related factors are resolved, lead prices will need new catalysts to determine direction. The most-traded SHFE lead contract is expected to trade within 16,550-16,950 yuan/mt next week. Spot price forecast: 16,450-16,650 yuan/mt. Consumption side, the lead-acid battery market remains in off-season mode, but with the holiday factor removed, downstream enterprises are expected to resume purchasing as needed. Supply side, secondary lead enterprises cut production, leading to regionally tight lead ingot supply, while primary lead production remained stable to slightly higher with relatively ample supply. Next week, attention should be paid to the impact of delivery on circulating supply. Lead prices are unlikely to see significant discounts (vs. SMM #1 lead). .

After the holiday, lead-acid battery enterprises gradually resumed production. However, the off-season trend in the battery market remained unchanged, and downstream enterprises were generally in a state of production cuts, so post-holiday restocking demand for lead ingots was relatively limited. Meanwhile, lead prices trended stronger this week, with SHFE lead briefly touching the 17,000 mark, which discouraged some restocking demand, and spot market transactions were sluggish. In addition, in the battery wholesale market, dealers saw limited inventory digestion during the Labour Day holiday, and there was no significant restocking demand after the holiday either.

[SMM Lead Morning Meeting Minutes: Geopolitical Tensions Resurface Outside China, Lead Prices to Give Back Some Gains] Tensions rise again in the Strait of Hormuz: Iran accused the U.S. of violating the ceasefire by launching airstrikes on Iranian coastal areas and oil tankers. Geopolitical events outside China resurfaced, the macro situation became tense, and non-ferrous metals largely pulled back. China's lead fundamentals underperformed...

【SMM Analysis】 Why Are Chinese Lead-Acid Battery Enterprises Taking More Holidays for the 2026 Labor Day? As the Labor Day holiday approaches at the end of April, SMM conducted a survey on holiday arrangements among lead-acid battery enterprises across 10 provinces in China.

According to SMM, the weekly comprehensive operating rate of lead-acid battery enterprises across five provinces was 65.5% from April 24 to April 30, 2026, down 3.09 percentage points WoW. Recently, the traditional off-season trend in the lead-acid battery market continued. With the Labour Day holiday approaching, producers successively planned to take holidays, with most Labour Day breaks lasting 2-5 days. Some enterprises chose to take early holidays or cut production at the month-end of April, leading to an early decline in the weekly operating rate of lead-acid batteries this week. Next week, as the Labour Day holiday period is underway, enterprise holiday time will increase, and the weekly operating rate of lead-acid batteries will weaken further.

This week was the week before the Labour Day holiday. The lead-acid battery market had a strong holiday atmosphere. Pre-holiday purchasing by dealers showed no significant changes. However, due to sluggish consumption in the end-use market, some dealers intended to offer sales promotions on batteries during the Labour Day holiday, while producers made no price adjustments due to cost factors. In addition, most producers planned to take holidays, and pre-holiday stocking demand in the lead market was limited. Combined with lead prices staying high, spot lead trading activity weakened WoW.

SMM April 28: Dealers in Jiangsu reported that replacement demand in the e-bike lead-acid battery market was sluggish, battery inventory was digesting slowly, and raw material costs such as lead ingots stayed high. The customary sales promotions in the battery market had yet to materialize, with the current wholesale price of the mainstream model 48V12Ah maintained at 280-300 yuan/set. Manufacturers in Zhejiang reported that demand in the e-bike lead-acid battery market was weak, dealers were cautious in procurement, and with the Labour Day holiday approaching, factories plan to shut down for 5 days. In addition, they plan to hold off on additional stockpiling of raw material lead before the holiday. Manufacturers in Shandong reported that the e-bike lead-acid battery market was in the off-season, with poor finished product orders. To avoid inventory buildup, factories maintained operating rates at 50-60%, and raw material lead was purchased only through just-in-time procurement.

SMM April 27: The e-bike lead-acid battery market continued its off-season trend. Dealers made limited purchases ahead of the holiday. Meanwhile, as costs of raw materials such as lead ingots and sulphuric acid stayed high, major lead-acid battery enterprises did not offer sales promotions on batteries during the off-season as they had in previous years. Currently, battery wholesale market selling prices remained largely unchanged. For example, the wholesale price of the mainstream model 48V20Ah stayed at 380-400 yuan/set.