SMM Analysis: Maintenance Recovery & Falling Zinc TC Shape May Refined Lead Output Outlook SMM May 1 News: In April 2026, China's refined lead production continued its modest upward trend, rising 1.22% month-on-month and 3.01% year-on-year.

In April 2026, China's secondary lead production showed a pattern of MoM rebound and YoY decline. Monthly secondary lead production was up 12.72% MoM and down 24.61% YoY; secondary refined lead production was up 8.7% MoM and down 33.14% YoY significantly.

[Secondary Lead Production Update] A medium-sized secondary lead smelter in east China has started production and begun furnace preheating, with lead output expected to begin in early to mid-May. According to SMM estimates, initial daily refined lead production is estimated at 200-300 mt, with actual output depending on equipment operation, raw material supply, and market conditions.

In Q1 2026, China's secondary lead market navigated through turbulence amid holiday effects and industry difficulties. Following a sharp production decline of over 140,000 mt in February, the market saw a post-holiday recovery rebound in March, but the recovery fell short of expectations, with the industry mired in the dual constraints of "profit pressure and tight raw material supply." Looking ahead to April, although large smelters are expected to resume production in a concentrated manner……

SMM, February 28 news： In February 2026, China's secondary lead market was squeezed by three factors—the holiday effect, high costs, and weak demand—leading to a significant pullback in production as expected, with industry operations characterized by "weak supply and demand and profit margins under pressure." Data showed that secondary lead production in February 2026 fell as expected by 140,000 mt, plunging 40.38% MoM and dropping 2.19% YoY; secondary refined lead output decreased 45.18% MoM and declined 11.36% YoY. In terms of the causes of production cuts, the primary factors were fewer calendar days in the month combined with the impact of the Chinese New Year holiday, which led to widespread shutdowns or production cuts at mainstream secondary lead smelters across the country. Worker departures for the holiday pushed operating rates to low levels, with particularly sharp declines in core production areas such as Jiangsu and Henan due to delayed worker returns and logistics constraints. Pressure on the cost side further exacerbated the scale of production cuts: before the holiday, scrap battery prices remained high due to recyclers' reluctance to sell, pushing up secondary lead smelting costs, while lead prices continued to trend weakly during the same period, causing widespread losses among secondary lead enterprises. Theoretical comprehensive profit/loss margins for large-scale producers were in negative territory, with small and medium-sized enterprises facing even more severe losses. Weakness on the demand side created a dual suppression: downstream battery producers entered the holiday early, causing lead ingot purchase willingness to hit rock bottom, while smelters' finished product inventories continued to accumulate, further dampening production enthusiasm among enterprises and ultimately leading to a sharp contraction in secondary lead output in February. Looking ahead to March, China's secondary lead market is expected to see a clear corrective rebound, with production forecast to increase by about 70,000 mt compared to February. The core driver of this trend is the comprehensive resumption of work and production across the industry chain after the holiday. With workers returning in concentration after the Lantern Festival, secondary lead smelters will enter a period of concentrated production resumptions, and some enterprises have indicated that they can resume operating at full capacity by mid-March. Gradual recovery in downstream demand will provide solid support for the production rebound: battery producers are resuming work successively, pre-holiday accumulated lead ingot inventories are entering a digestion cycle, and purchase willingness is expected to continue improving. Meanwhile, some secondary lead enterprises need to ramp up production to fulfill long-term contract delivery obligations, further driving up operating rates. On the raw material side, the scrap battery recycling market is gradually recovering after the holiday, and smelters' raw material inventories are expected to be replenished, easing supply constraints. Although enterprises still face certain profit pressures, with the combined effects of demand recovery, order support, and inventory digestion, production enthusiasm in the secondary lead industry is expected to improve significantly. Output in March is likely to achieve a substantive rebound, and industry operations will gradually return to normal.

During the week of February 22 to February 26, 2026, the average operating rate of primary lead smelters in three provinces was 51.47%, up 1.14 percentage points WoW from the rate during the Chinese New Year holiday week, but down 8.24 percentage points WoW from the pre-holiday rate.

SMM February 27: The weekly operating rate of secondary lead in four provinces was 29.73% from February 20 to February 26, 2026, up 1.07 percentage points WoW. Due to losses from market conditions, secondary refined lead smelters in Anhui showed low enthusiasm for production, and the progress of production resumptions remained slow. In Henan and Inner Mongolia, production cuts occurred during the Chinese New Year holiday and had not yet recovered, keeping the operating rate flat WoW. Although production cuts occurred in Jiangsu during the Chinese New Year holiday, operations gradually resumed this week, with the operating rate increasing by 7.71 percentage points. Entering next week, some secondary lead smelters will start production for furnace drying, but lead output will concentrate in late March. SMM expects the operating rate to remain stable next week. 》Order to View SMM Metal Spot Historical Prices

Futures: Overnight, LME lead opened at $1,957/mt, moving sideways around the daily average during the Asian session. Entering the European session, the US dollar index strengthened before pulling back, and the broad-based gains in nonferrous metals boosted LME lead to rise all the way to a high of $1,996/mt. After small fluctuations at high levels, it finally closed at $1,995.5/mt, up $36/mt or 1.84%. Overnight, the most-traded SHFE lead contract opened at 16,715 yuan/mt, initially dipped to a low of 16,700 yuan/mt, then fluctuated upward, lightly touching 16,800 yuan/mt at highs, and finally closed at 16,790 yuan/mt, up 45 yuan/mt or 0.27%. On the macro front: US Trade Representative Greer recently stated that the US will continue to advance the 301 investigation into China's implementation of the Phase One trade deal and may take tariff measures. Against the backdrop of a rebound in risk appetite, market expectations for the US Fed to start interest rate cuts before mid-year have significantly cooled, with expectations for a June rate cut diminishing. German Chancellor Friedrich Merz paid his first official visit to China from February 25 to 26, accompanied by a high-level delegation including 30 representatives from the German business community. Spot fundamentals: In the Shanghai market, Chihong lead was quoted at discounts of 80-50 yuan/mt against the SHFE lead 2603 contract. SHFE lead maintained a consolidation trend, and as it was late February with the transition between old and new long-term contracts, some suppliers actively cleared inventory by shipping goods at discounts, while a few traders purchased on dips. Downstream enterprises were still in the early stages of resuming work, with limited rigid demand and few inquiries. In terms of secondary lead, some smelters had not yet resumed production, market quotations were scattered, operating enterprises held prices firm for shipments, and secondary refined lead was quoted at premiums of 0-25 yuan/mt against the SMM #1 lead average price ex-works. Downstream enterprises adopted a wait-and-see approach with minimal purchases, and spot order market transactions had not improved significantly. Inventory: On February 25, LME lead inventory decreased by 25 mt to 286,300 mt. As of February 24, the total social inventory of lead ingots across five regions tracked by SMM accumulated further, with the total jumping to a five-month high. Today's lead price forecast: This week, downstream enterprises gradually resumed work and production, with spot purchases mainly focused on long-term contract cargo pick-up, while spot order purchasing demand remained weak. On the supply side for refined lead, primary lead smelters in Hunan that underwent maintenance and production cuts during the holiday gradually resumed crude lead production; primary lead output is expected to recover sequentially from early March to mid-March, with quotations relatively firm. For secondary refined lead, supply recovery was limited by the end of February, but a concentrated recovery is anticipated in early March. Subsequently, the lead market is expected to see both supply and demand increase after the recovery in lead consumption. This week, as the supply of refined lead has not yet recovered concentratedly, support for lead prices remains moderate, and lead prices may continue to move sideways in the short term.

With the Chinese New Year holiday falling in mid-February and weak end-use consumption, lead-acid battery producers scaled back pre-holiday stockpiling compared with previous years. The sluggish sales of lead ingots intensified finished product inventory pressure on secondary lead smelters. According to SMM, enterprises suspending production during the holiday started their breaks one week earlier YoY. Coupled with three fewer calendar days in February compared with January, secondary lead ……

[Secondary Lead Production Update] A large secondary lead smelter in east China started furnace drying operations on Monday and is expected to begin formal production by the end of this week. According to SMM analysis, the smelter's production resumptions are projected to contribute over 10,000 mt to secondary refined lead output in November, which will have a positive impact on market supply.