[SMM Lead Concentrates Market Update] This week, domestic smelters reported that lead concentrate quotes in the market continued to show significant divergence. Among them, high-grade lead concentrates (with lead content exceeding 55%) remained in tight supply, with market quotes staying stable compared to last week. Some smelters noted that the slight increase in lead concentrate prices in April was because, following the weakening of precious metal prices, sellers opted to slightly raise TCs as a substitute for adjusting the payable indicator, while there were no obvious signs of easing in overall lead concentrate supply in the market.

This week, domestic smelters still noted that lead concentrate quotes varied considerably in the market, supply of high-grade (with lead content above 55%) lead concentrates remained tight, and market quotations were stable WoW. Some smelters mentioned that the slight increase in lead concentrate prices in April occurred because sellers chose to slightly raise TCs instead of adjusting the payable indicator after precious metal prices weakened, while lead concentrate supply did not show any notable easing. This week, lead concentrate TCs across regions were broadly steady, the rise in sulphuric acid prices had no significant impact on lead concentrate TCs, and silver payable indicators for lead concentrates of various silver contents held firm in the market.

In April, the supply of lead concentrates in the Chinese market was slightly more relaxed than in March. Smelters reported that price quotes for different grades of lead concentrates varied significantly. After a modest rise in some lead concentrate prices early in the month, prices remained stable this week. Although smelters attempted to negotiate on the silver payable indicator, aside from a slight reduction in the previously increased coefficient for a few silver-bearing lead concentrates with over 2,500 grams of silver per mt in physical content, the prevailing intention among traders and mining enterprises was generally to raise TCs instead of adjusting the payable indicator. As a result, the silver payable indicators for lead concentrates of various silver grades did not show significant changes in the market.

Next week, key economic data releases include the US December non-seasonally adjusted CPI annual rate and the US November retail sales monthly rate, while the US Fed will publish the Beige Book. Recent market trading has continuously revolved around risk events such as US tariffs and geopolitical issues. Particularly after the temporary end of the speculative frenzy in assets like silver, market attention on macro risk events has intensified. On the LME lead front, after the New Year holiday, excluding the sharp rally driven by fund flows, the overseas lead market also resumed normal trading post-holiday. LME lead inventory dropped by over 15,000 mt compared to pre-holiday levels. Meanwhile, some uncertainties emerged in overseas mine production and transportation, with lead concentrate prices remaining firm, continuing to support lead prices. LME lead is expected to consolidate within a range of $1,980-2,065/mt next week. Domestically, for SHFE lead, weak lead consumption in China has become more pronounced. Lead smelter plant inventories and social warehouse stocks both increased, while spot discounts for lead widened. Additionally, as SHFE lead enters the delivery period next week, suppliers are relocating stocks to delivery warehouses, and visible lead ingot inventory is expected to have further room to rise, potentially weighing on lead prices and leading to a weaker trend. The most-traded SHFE lead contract is forecast to trade between 17,050-17,500 yuan/mt next week. Spot price forecast: 17,000-17,350 yuan/mt. For primary lead, lead smelters have resumed production, and finished product inventories are relatively high, with spot transactions generally conducted at discounts. Next week's SHFE lead delivery may alleviate suppliers' sales pressure to some extent through warehouse shipments, and spot discounts are expected to widen only modestly. Meanwhile, secondary lead cannot participate in delivery and relies solely on actual consumption. Against the backdrop of high lead inventories, secondary refined lead will continue to trade at large discounts. On the demand side, downstream market consumption shows significant divergence, and lead demand is fragmented. If lead prices stop falling and stabilize next week, some restocking demand for rigid needs may emerge.

SMM October 16: The most-traded SHFE lead 2511 contract opened at 17,115 yuan/mt and fluctuated around 17,120 yuan/mt after opening. Mediocre end-use consumption of lead coupled with production resumptions at secondary lead smelters caused lead prices to struggle to rise, eventually closing at 17,100 yuan/mt, down 0.06%, forming a small bearish candlestick, with open interest at 41,899 lots. Recently, the lead import window briefly opened, and imports of crude lead have been profitable since mid-to-late September. Subsequently, small volumes of high-grade imported refined lead from overseas may arrive at ports, and expectations of increased supply in the spot market are bearish for lead prices. In terms of downstream end-use consumption, the peak season for the e-bike replacement market is coming to an end, while orders for new EVs and the automotive sector show moderate performance. Due to tariff impacts, orders in the battery export sector are relatively mediocre. Currently, raw material inventories for refined lead can maintain supply, but in late October, attention should still be paid to the cost support from scrap battery and lead concentrate prices providing a floor for lead prices. Data source statement: Except for publicly available information, other data are processed by SMM based on public information, market communication, and SMM's internal database model, for reference only and do not constitute decision-making advice.