SMM expects secondary lead prices to remain in the doldrums in H2. High scrap battery costs provide rigid bottom support for lead prices, but triple negative factors—macro rate hike expectations, high LME inventories, and the downstream consumption off-season—continue to cap the upside room……

SMM, July 10: This week, the supply of secondary crude lead continued to tighten. Smelters in multiple regions voluntarily cut production, weighed down by raw material shortages and losses on production. Insufficient supply of scrap batteries led most suppliers to hold back from selling, leaving only a small volume of circulating cargo in the market. The battery downstream was in the traditional consumption off-season, with manufacturers only making just-in-time procurement. Price negotiations between buyers and sellers remained difficult, and spot cargo transactions were sluggish. Next week, the raw material shortage is unlikely to ease, and with extreme weather forcing production halts at some smelters, the supply of secondary crude lead will further decline, supporting prices that are more likely to rise than fall.

[Secondary Lead Production Update] A secondary lead smelter in south-west China said that its dismantling line has been maintaining normal operation recently, while crude lead smelting remains suspended, with the specific resumption time yet to be determined.

[Secondary Lead Production Update] A secondary lead smelter in North China reported that heavy rain has caused flooding in its city, resulting in water and power outages. This has affected secondary crude lead production by about 100-150 mt/day. The specific production resumption time depends on the government's repair progress.

Recently, China's lead prices have continued to weaken. Secondary smelters have been broadly trapped in a dual predicament of production losses and a shortage of scrap battery raw materials. SMM's statistics on production cuts and resumption plans at secondary lead enterprises across the country in June–July clearly reflect the current pressure on the industry.

Recently, China's lead prices have continued to weaken, with secondary smelters generally caught in a double dilemma of processing losses and a shortage of scrap battery raw materials. The SMM survey of production cuts and resumption plans at secondary lead smelters nationwide from June to July clearly reflects the current pressure on the industry. I. June Secondary Lead: Significant polarization among enterprises, slight overall increase In June 2026, smelter operations across regions polarized: Core logic of production cuts: Multiple enterprises in east China (A/C/D/F), north China (I), and south China (K/L) proactively reduced loads or suspended production due to falling lead prices, which caused losses on production, and insufficient scrap battery recycling volumes. A single smelter in these areas cut output by as much as 9,000 mt; other scattered enterprises across other regions cut an additional 4,700 mt. Increase offset by production resumptions: Smelters in east China (B/E), central China (G/H), north China (J), and northwest China (M) resumed production after maintenance and raised output using imported crude lead as feed, forming an offsetting increase. After combining increases and decreases, national secondary refined lead output in June edged up by 4,200 mt MoM, with supply still having some support. II. July Expectations: Losses deepen, supply increase essentially disappears Entering July (estimate E), the industry's loss-making scope expanded further, and the magnitude of production cuts escalated significantly: Large-scale planned production cuts: Multiple smelters in east China (A/D), central China (F), and north China (G) explicitly planned to concentrate production cuts due to market losses, with a single smelter in north China reducing output by 9,200 mt - a scale far exceeding that of June. Although some enterprises had production resumption plans for mid-to-late July, they all indicated they need to watch lead price trends, making the pace of resumptions uncertain. Limited increase from production resumptions: Only a few enterprises in east China (B/C), northwest China (I), and north China (H) resumed production after maintenance or adjusted internal output to raise volumes, with the increase unable to cover the production cut gap. Overall estimates for the full month show that secondary refined lead in July will edge down by only 400 mt MoM, shifting from a slight increase in June to basically flat, as the increase is fully offset by reduction cuts driven by losses. III. Interpretation in the context of current lead market conditions The current core contradiction in the lead market is centered on ample primary lead supply + weak downstream battery demand during the off-season, which has kept lead prices falling under pressure, directly squeezing secondary lead smelters' processing margins: 1. Scrap battery purchase prices remain rigid and hard to fall, while refined lead selling prices weaken, leading to inverted TCs for smelters. Proactive production cuts to avoid risks have become a common choice. 2. On the raw material side, scrap battery recycling volumes are already at off-season lows, and losses further reduce enterprises' willingness to purchase materials, forming a negative cycle of "price decline → less material collection → production cuts". 3. Although some maintenance-related production resumptions are scheduled for July, the willingness to resume highly depends on a lead price recovery. If the market remains sluggish, originally planned resumptions may be delayed, and further tightening expectations for secondary lead supply will provide bottom support for lead prices.

[Secondary Lead Market Update] Lead prices weakened this week. Secondary crude lead sellers held back from selling, while downstream procurement was sluggish and trading was thin. Imported crude lead supply was limited. The supply-demand situation for secondary crude lead is unlikely to change next week, making it essential to focus on the profitability of importing crude lead.

SMM July 3: Lead prices weakened this week, and secondary crude lead sellers generally held back from selling. Downstream alloy and refined lead smelters were weighed down by sluggish end-use demand, leading to weak purchase willingness and overall thin spot trading. The profit window for imported crude lead was narrow at present, limiting incoming shipments. Only some low-cost overseas materials containing antimony and tin arrived at ports, with EXW prices close to parity with the SMM #1 lead average price. Next week, the supply-demand pattern for secondary crude lead is not expected to change significantly. Going forward, the focus will be on tracking profit and loss changes for imported crude lead.

[SMM Market Update] Lead-acid battery end-use consumption is sluggish, with weak purchasing demand for lead ingots and lead alloys. Some refined lead and alloy smelters have cut or halted production; meanwhile, domestic secondary crude lead smelters are under sales pressure. Going forward, attention should be paid to the opening of the import window; if imported crude lead flows in significantly, the sales pressure on domestic secondary crude lead smelters will intensify.

SMM June 26: This week, SHFE lead futures pulled back slightly, and secondary crude lead prices weakened in tandem. Smelters, facing widening losses, generally held back from selling, leaving spot order supply tight. Additionally, with the rebound in the SHFE/LME price ratio, imported crude lead generated a small profit. Looking ahead to next week, imported crude lead supply activity is expected to increase, while the tight supply pattern, supported by domestic smelter maintenance and tight raw material supplies, will remain unchanged. Overall, short-term sentiment was suppressed by the off-season, and secondary crude lead prices are expected to maintain a fluctuating trend.