SMM July 22: Overnight, LME lead opened at $1,880/mt, drifting higher during Asian trading hours. Entering the European session, it rose to a high of $1,890/mt before weakening due to increased bearish positions, giving up all gains to hit a low of $1,867/mt, and finally settled at $1,868/mt, down 0.48%. Overnight, the most-traded SHFE lead 2609 contract opened lower with a gap at 15,820 yuan/mt. After briefly touching a high of 15,880 yuan/mt in early trading, it drifted lower. As bears added positions, SHFE lead hit a low of 15,700 yuan/mt and finally settled at 15,715 yuan/mt, down 1.07%. Demand side, the off-season consumption in the lead-acid battery market persists. Downstream enterprises continue to purchase as needed. As some enterprises have expectations of holidays, the subsequent purchasing intensity for lead ingots will further decline. Supply side, secondary lead enterprises maintain low operating rates, with limited circulating supplies in the market, while primary lead supply is relatively ample. The spot market is expected to continue trading at a discount. Additionally, high uncertainty in the Middle East conflict has raised energy and shipping costs, becoming one of the factors affecting lead prices.

Futures: Overnight, LME lead opened at $1,880/mt, drifting higher during the Asian session. Entering the European session, it tested a high of $1,890/mt before weakening as bears added positions, giving back all gains to dip to $1,867/mt, and finally closing at $1,868/mt, down 0.48%. Overnight, the most-traded SHFE lead 2609 contract opened lower with a gap at 15,820 yuan/mt, dipped slightly to a high of 15,880 yuan/mt before drifting lower, with bears adding positions to push SHFE lead down to 15,700 yuan/mt, and finally closed at 15,715 yuan/mt, down 1.07%. On the macro front: Trump: Iran wants to meet but we are not interested; will strike the Harzand region in Iran (where nuclear facilities are reportedly located) very hard; if the Houthis blockade the Red Sea, the US will "take action". Iran's military struck a US airbase in Bahrain, saying that if the US attacks Iran's nuclear facilities, all US and allied interests in the region will become targets. The 10% temporary tariff is about to expire, US Trade Representative previews new tariffs will soon fill in; according to the UK Financial Times: Trump is about to impose new tariffs on dozens of countries as soon as this week. China's MIIT lithium battery and similar products standard working group: will hold discussions on 10 industry standards for solid-state lithium batteries. The A-share STAR 50 Index surged over 10%, hitting a new high for the year in its biggest single-day gain. Spot Fundamentals: SHFE lead continued to move sideways, with suppliers selling as needed, though there were few quotations in the Jiangsu, Zhejiang, Shanghai region. Additionally, EXW cargoes from primary lead smelters were ample and generally quoted at discounts, with mainstream production areas offering at discounts of 50-0 yuan/mt against the SMM #1 lead average price. For secondary lead, smelters showed modest enthusiasm for shipments, with limited circulating supply in the market; some secondary refined lead quotations were at discounts of 50-0 yuan/mt against SMM #1 lead. Downstream enterprises remained cautiously on the sidelines, digesting inventories during production, with some waiting for new monthly long-term contract execution and only a small amount of just-in-time procurement, leading to sluggish market transactions. Inventory: On July 21, LME lead inventory decreased by 2,025 mt to 449,750 mt; as of July 20, total social inventory of SMM lead ingots across five regions fell by 8,000 mt MoM from July 16. Today's Lead Price Forecast: Demand side, the lead-acid battery market remained in its consumption off-season, with downstream enterprises maintaining purchases as needed; as some enterprises have holiday expectations, lead ingot purchasing strength is expected to weaken further. Supply side, secondary lead enterprises maintained low operating rates with limited supply circulating in the market, while primary lead supply was relatively ample; spot market transactions are expected to remain skewed towards discounts. In addition, the high uncertainty of the Middle East conflict has driven up energy and shipping costs, which has become one of the factors affecting lead prices.

Next week, key macroeconomic data will include US June housing starts, building permits, industrial production, and the University of Michigan consumer sentiment index, which will influence market expectations for the Fed's rate path. Meanwhile, the ongoing Middle East geopolitical conflict continues to escalate, with shipping volume through the Strait of Hormuz falling to about one-tenth of pre-war levels. Geopolitical risks have pushed oil prices higher, raising supply-chain cost expectations. LME lead, within the week LME lead inventory surged by 160,000 mt, sparking risk-off sentiment and driving LME lead to its lowest level in over a year. As lead prices fell, the LME lead Cash-3M spread remained in a deep contango, with the latest quote at -$43.83/mt. Moreover, heightened uncertainty over the Middle East conflict, along with rising energy and shipping costs, may become another factor affecting lead prices. Once the inventory buildup news is digested by the market, lead prices are expected to get a breather. Next week, LME lead is expected to trade at $1,850-1,905/mt. SHFE lead, visible lead ingot inventories first increased then declined this week due to delivery factors and downstream purchasing. After the bearish news of overseas inventory buildup ran its course, market attention in China shifted to the production dynamics of secondary lead enterprises and downstream purchasing trends. If lead ingot inventories continue to destock, lead prices are expected to return to 16,000 yuan/mt. The most-traded SHFE lead contract is expected to trade at 15,600-16,150 yuan/mt next week. Spot lead price forecast: 15,650-15,950 yuan/mt. Consumption side, the lead-acid battery market remains in the off-season, with downstream enterprises continuing to purchase as needed. However, as lead ingots re-enter the circulation market after delivery, downstream cargo pick-up is expected to increase. Supply side, secondary lead enterprises maintain low operating rates, with limited supply circulating in the market, while primary lead supply is relatively ample. The spot market is expected to continue trading at a discount.

SMM July 10: This week, secondary refined lead supply was tight, off-season demand weighed on trading, premiums against the SMM #1 lead average price consolidated around parity, and actual transactions were mostly at a discount of 20-30 yuan/mt. Secondary lead production continued to incur losses. As of July 10, 2026, the theoretical consolidated profit and loss for large-scale secondary lead enterprises was -277 yuan/mt, and for medium- and small-scale secondary lead enterprises, it was -464 yuan/mt. Smelter operating rates are currently low, with production cuts in many regions; downstream demand is weak, scrap battery costs remain firm, and losses are unlikely to improve in the short term. Additionally, suppliers, under pressure from losses, kept offers firm. SMM expects spot order shipment prices for secondary refined lead to maintain parity or a small premium against the SMM #1 lead average price next week.

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.

[2026 Lead Concentrate Production, Imports, and TCs: A Comprehensive Review and H2 Market Outlook]In H1 2026, intensified geopolitical games and rising trade policy uncertainties posed multiple challenges to the lead-zinc industry chain, including structural adjustments in ore supply, persistently declining TCs, and smelting costs under pressure. Lead concentrates remained in deficit, and the profit center shifted to by-products on the smelting side.

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, Jul 3 – This week, secondary refined lead fell by 200 yuan/mt alongside the SMM #1 lead ingot price. EXW prices for secondary refined lead ranged from parity to a premium of 25 yuan/mt, with delivered cargoes at a highest premium of 100 yuan/mt. Smelters, facing losses, held prices firm and held back from selling, while downstream battery plants made just-in-time procurement during the off-season. The market saw prices but few deals, with sluggish transactions, and significant improvement in trading activity is unlikely in the short term. As of Jul 3, large-scale secondary lead enterprises in China incurred a loss of 548 yuan/mt, while losses at small and medium-sized secondary smelters widened to 742 yuan/mt. Finished secondary lead prices continued to trend downwards, and scrap battery raw material costs fluctuated at highs. This week, smelters’ losses widened further WoW. Currently, secondary lead smelters’ overall operating rate remains at a low level, and enterprises are awaiting a recovery signal in end-use consumption in July. It is expected that overall secondary lead supply volume next month will be basically flat with this month, and the premium range for secondary refined lead will remain stable in the short term.