Automobile battery and export demand are dragging on demand, lead ingot demand is difficult to grow significantly, considering the inventory building rhythm of lead battery enterprises, it is expected that downstream purchase demand will weaken after the National Day holiday.

Recently, due to the weakness of downstream demand and the tension of raw material supply, the recycling lead smelters have significantly reduced production, leading to a sharp contraction in the supply of lead ingots, but the demand continues to grow, and the trend of LME lead price is strong. In terms of the foreign market, the expectation of interest rate cut by the Fed in early September has driven the LME lead price up. With the Fed's interest rate cut as scheduled and the dovish signal released by Fed Chairman Powell, the LME lead price has given up some of the gains.

Looking at the supply side, on the overseas mine side, after the commissioning of the Endeavor mine, the shipment volume continues to grow, and the maintenance of the Vedanta-Zinc India mine and the resumption of the Aripuan? mine will also contribute to the supply increase, and the overseas supply may increase slightly. Domestically, although the mine production profit is high, the utilization rate is also high, and the space for further production increase is relatively limited, and it is expected that the domestic ore production will remain at a high level in the short term. Overall, the growth space for ore supply is limited, the raw material inventory of smelters has significantly declined, the processing fee continues to be adjusted downward, and some smelters have started to prepare for the winter reserve in advance, and it is expected that the short-term ore supply and demand will remain in a tight balance.

In terms of primary lead, the tight supply of raw materials has led to production cuts at some refining plants, but the high prices of by-products have limited the extent of production cuts, and the production rate is still at a high level for the same period in recent years. It is expected that the output of primary lead will decrease slightly. In terms of secondary lead, with the recovery of production profits and the increase in the number of imported raw materials, the expectation of enterprises resuming production is strong. From the raw material inventory and production scheduling, it is expected that the resumption of production will occur in the early part of October.

Looking at the demand side, on the one hand, the recent increase in demand for electric bicycle batteries has led to a rise in the production rate of lead-acid batteries and a corresponding increase in the demand for lead ingots. On the other hand, the slowdown in the growth rate of electric vehicle sales in the second half of this year, combined with limited demand for the replacement of automotive batteries, has resulted in a lackluster performance in automotive battery demand. Additionally, the end of the "rush to export" in the automotive industry has led to a more pronounced trend of declining battery exports in the fourth quarter. Overall, the automotive battery and export demand have formed a drag on demand, and the demand for lead ingots is not expected to increase significantly. Taking into account the inventory-building pace of lead-acid battery manufacturers, it is expected that downstream purchasing demand will weaken after the National Day holiday.

Macro wise, the Fed's short-end rate-cutting path is relatively clear, and considering that the market has already fully priced in the rate cuts, the subsequent impact is relatively limited.

To sum up, before October, the supply and demand of lead ingot will maintain a tight balance, and the lead price has strong support on the downside. With the subsequent recovery of recycled lead enterprises and the lack of further growth in demand, the supply and demand of lead ingot will turn to loose, and the lead price may face the risk of adjustment.

As an integrated internet platform providing benchmark prices; On September 29th, the benchmark price of lead by SunSirs was 16,975.00 RMB per ton, an increase of 1.16% compared with the beginning of this month (16,780.00 RMB per ton).

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