SMM December 3 News: The most-traded SHFE lead 2601 contract opened at 17,180 yuan/mt today, edged up slightly along the daily average line in the morning, and rose again after a brief sideways consolidation at noon, hitting a high of 17,240 yuan/mt, and finally closed at 17,210 yuan/mt, up 30 yuan/mt or 0.17%, marking the second consecutive day of gains. Recently, primary lead and secondary lead smelters in many regions across the country were under maintenance or shutdown this week, and both primary lead and secondary lead production were expected to decline this month, indicating a contraction in supply. The previous decline in lead prices led to a drop in the purchase price of waste lead-acid batteries, and as the price has not yet rebounded, suppliers of waste lead-acid batteries were reluctant to sell their inventories at low prices, showing a "reluctance to sell" mentality. The actual volume of waste lead-acid batteries received by recycling enterprises in some regions such as east, central, and north China decreased significantly, and the spot scrap battery supply in the market was relatively tight. This may subsequently affect the raw material supply for secondary lead. Moreover, the operating rate of lead-acid battery plants increased recently. Under the dual effects of constrained supply and released demand, lead prices were expected to gain support and the trend was likely to warm up. Data Source Statement: Except for public information, other data were processed by SMM based on public information, market communication, and SMM's internal database model, for reference only and not constituting decision-making advice.

SMM December 2: The most-traded SHFE lead 2601 contract opened at 17,145 yuan/mt today. After fluctuating along the daily average line in early trading, it experienced a slight correction to 17,110 yuan/mt. Subsequently, due to increased positions by bulls, SHFE lead fluctuated upward and finally closed at 17,210 yuan/mt, up 125 yuan/mt, or 0.73%, forming a small bullish candlestick. This week, primary lead and secondary lead smelters saw both maintenance and production resumptions, but overall production showed a downward trend. Downstream lead-acid battery plants saw improved production and intended to build inventory at low prices, potentially increasing their demand for lead ingots in the future, thereby boosting smelters' production enthusiasm. Since late November, lead prices continued to fall, waste lead-acid battery recycling enterprises were bearish on the market outlook, most of them "sold off" inventory to reduce risks, and their in-factory inventory remained at low levels. Meanwhile, holders of spot cargo (stores) were reluctant to sell scrap batteries due to the psychology of "selling when prices rise, not when they fall," leading to a WoW decrease in recycling enterprises' purchase volume. As lead prices stopped falling and stabilized, waste lead-acid battery holders in the market may wait to sell at high prices. In the short term, the recycling volume of waste lead-acid batteries in the market will remain low, a phenomenon that may further promote the warming of lead prices. Data source statement: Except for public information, other data are processed by SMM based on public information, market communication, and SMM's internal database model, for reference only and not constituting decision-making advice.

According to SMM's weekly survey, the average operating rate of lead-acid battery manufacturers in five provinces stood at 72.15% during August 30-September 4, 2025, up 1.56 percentage points WoW. The WoW increase in operating rates was mainly attributed to the completion of month-end inventory checks at some lead-acid battery plants, coupled with improved demand for new vehicle matching. For instance, the implementation of the new national standard for e-bikes boosted new orders for manufacturers with complete vehicle matching contracts, pushing their operating rates to near full capacity. However, replacement demand remained weak in markets such as e-bikes and automobiles, while substitution by lithium batteries and sodium-ion batteries intensified—affecting segments like electric three-wheelers and small household ESS batteries. Additionally, impending Middle East tariff sanctions further reduced lead-acid battery orders. Beyond the production cuts reflected in the weekly operating rate data, output also declined at plants in regions like Guangdong, with some manufacturers' operating rates falling below 50%.

In China, despite local supply improvements, September will see secondary lead smelters' cuts reduce scrap battery demand, keeping prices stable with little chance of significant increases.