[SMM Lead Morning Meeting Minutes: Overseas Inventory Buildup Weighing Down, Lead Prices Weakening in Tandem Inside and Outside China] Bearish factors in markets outside China have continued to ferment, geopolitical risks remain, compounded by a sharp increase in LME lead inventories to a near 14-year high, exerting significant pressure on lead prices...

SMM July 14 News: Lead prices fell sharply today, directly dragging down the scrap battery recycling market. Some smelters simultaneously lowered their purchase prices for batteries, and recyclers suffered losses on material procurement, daring not to purchase in large quantities. The amount of circulating scrap batteries was already scarce, and retail holders and repair shops held back from selling, waiting and watching, unwilling to sell at low prices. Supply and demand were locked in a stalemate, trading activity was sluggish, and there were no clear signs of recovery in the short term. Most traders held a wait-and-see sentiment, waiting for prices to stabilize.

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.

SMM, July 9: Scrap battery offers were low, and recyclers’ willingness to sell was poor. Lead prices performed poorly; secondary lead smelters’ purchase offers for scrap batteries were too low, and waste lead-acid battery recyclers showed low willingness to sell due to thin profits. Additionally, extreme weather had been frequent recently, and highway closures also affected transportation; most smelters reported average arrivals.

SMM, July 7: Today, futures maintained a weak downward trend, and spot prices edged down by 25 yuan/mt; smelters' procurement quotes for scrap batteries remained stable, and essential restocking demand and routine production provided short-term price support. Currently, smelters' procurement costs for scrap batteries fluctuated at highs, and along with the continued weakening of spot finished products, smelting profit margins continued to shrink, and the scope of production cuts and shutdowns in the industry gradually expanded. On the other hand, affected by the consecutive pullback in procurement prices, shops held back from selling, and arrivals of scrap batteries decreased markedly.

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.

SMM July 3 News: The most-traded SHFE lead 2608 contract opened at 15,850 yuan/mt in intraday trading. In the morning session, it surged in a choppy manner, hitting an intraday high of 15,965 yuan/mt, before turning downward and weakening. In the afternoon, it continued to consolidate at lows, recovered slightly in late trading, and traded in a choppy manner. At the close, it settled at 15,885 yuan/mt, ending a four-day losing streak and recording a small bullish candlestick, gaining 120 yuan, or 0.76%. In the short term, lead prices were pressured by three bearish factors: weak seasonal demand in the battery off-season, inventory buildup from concentrated production resumptions at primary lead enterprises, and expectations for US Fed interest rate hikes. However, tight supply of scrap batteries pushed up smelting costs, and widespread production cuts due to losses at secondary lead smelters, combined with a global shortage of refined lead, provided bottom support for prices. In the short term, SHFE lead remains in the doldrums, with limited downside room. In the future, the focus should be on tracking downstream procurement, production resumptions at secondary lead smelters, lead ingot imports, and macro inventory changes outside China. Data Source Statement: Other data beyond public information is based on public data, market communication, and SMM's internal database models, processed by SMM, and is for reference only, not constituting any decision-making advice.

SMM July 3 News: Overnight, lead prices edged up slightly. Domestic smelters mostly maintained a wait-and-see stance, waiting for the futures market to stabilize. Smelters faced significant loss pressure, while prices for finished lead exports weakened. Coupled with high costs of raw materials such as scrap batteries, enterprises' willingness to adjust prices remained generally conservative. During the week, the pace of raw material circulation diverged: in the first half, lead prices continuously declined, and recyclers' willingness to sell rose significantly; in the second half, the market's available supplies gradually tightened. Combined with today's rebound in lead prices, smelters did not simultaneously raise their purchase prices, and recyclers' enthusiasm for selling also cooled. Overall, in the short term, purchase prices for scrap batteries will remain stable.

In June 2026, SMM secondary refined lead production rose slightly by 2.23% MoM, but dropped sharply by 31.2% from the 2026 peak of 282,000 mt in January. The industry’s production center shifted lower continuously in Q2. SMM’s weekly operating rate for secondary lead across four provinces hovered in the range of 28.4%–29.7% throughout the month, staying well below the normal reasonable range for a prolonged period.

Next week, several key economic data will be released, mainly including China's official manufacturing PMI for June, the US June ADP employment figure, the US June unemployment rate, and the US June seasonally adjusted non-farm payrolls. Recently, US-Iran diplomacy achieved a phased breakthrough, with both sides signing a memorandum of understanding, leading to the reopening of the Strait of Hormuz to shipping and the recovery of crude oil and other supplies. However, conflicts along the Lebanon-Israel border have been recurring, and the ceasefire agreement remains fragile, necessitating cautious optimism. Additionally, short-term inflation data and hawkish signals pushed up expectations for US Fed interest rate hikes, while market views diverged and conflicted, requiring closer attention to next week's economic data outcomes. As for LME lead, affected by the lifting of shipping restrictions in the Middle East and expectations for US Fed interest rate hikes, market bearish sentiment surged, and LME lead prices fell continuously, nearly breaking below $1,900/mt. While lead prices were declining, the LME Cash-3M contango widened, with the latest quote at -$33.6/mt. Notably, LME lead inventories have been on a downtrend for four consecutive weeks, with total inventories dropping below 300,000 mt, the latest figure at 297,500 mt. It is expected that short-term macro risk factors still exist, and fundamental factors present contradictions. Lead prices are expected to remain in the doldrums, with LME lead forecast to trade between $1,875 and $1,945/mt. As for SHFE lead, entering July, with the semiannual capital repatriation factor removed, upstream and downstream enterprises will resume regular trading. Meanwhile, supplies of lead concentrates and scrap batteries remain constrained, with secondary lead enterprises incurring significant losses. Production resumptions have been delayed, and there are additional production cuts. Coupled with the persistent inversion between secondary and primary lead prices, these factors will provide support for lead prices in the short term. However, we also need to be vigilant about macro bearish factors, with lead prices expected to be in the doldrums, while watching the lead ingot import window. The most-traded SHFE lead contract is expected to trade between 15,950 and 16,400 yuan/mt. Spot price forecast: 15,950-16,250 yuan/mt. Before the end of June, some large downstream enterprises will close accounts and take inventory, which will continue to disrupt trading activity for lead ingots. Once July arrives, the lead market will return to normal trading. In some regions, transactions for primary lead at a significant contango (against SMM#Pb) are expected to decrease, or the contango will narrow. On the secondary lead side, constrained by losses, smelters' shipments are limited, and some enterprises already have inventory buildup. If arrivals of imported lead increase to supplement supply, it cannot be ruled out that secondary refined lead may turn to widen the contango.