According to China Nonferrous Metals News, as U.S. tariff policies gradually solidify, lead ingot fundamentals have resumed their role in dictating price fluctuations. Entering the second half of the year, environmental production restrictions on recycled lead eased, while demand recovery remained relatively limited. This led to a return to ample supply in the lead ingot market, causing lead prices to fluctuate downward. As losses at recycled lead smelters widened, coinciding with the release of Document No. 770 by four government departments including the National Development and Reform Commission, some recycled lead smelters suspended operations to observe market developments. However, on the demand side, the implementation of new national standards for electric bicycles spurred manufacturers to adjust production lines, boosting demand for vehicle-specific batteries. This tightened the fundamentals for lead ingots, driving prices back up.

Additionally, the dominant factor influencing LME lead prices in the second half of the year has shifted back to expectations of Fed rate cuts. Following the significant downward revision of August U.S. nonfarm payroll data, the probability of further Fed rate cuts this year has gradually increased. Consequently, LME lead prices are expected to follow a volatile trajectory, initially declining before rebounding.

Uncertainty Surrounding Fed Rate Cut Timeline

The primary macroeconomic narrative in the medium term remains the Fed's rate cut trajectory. In revising its monetary policy framework, the Fed eliminated tolerance for inflation overshooting, redefined “maximum employment,” and modified the concept of the “gap” between current employment and its peak level. It adopted a balanced approach to advance its dual objectives of employment and inflation, emphasizing a balanced dual mandate amid high inflation and high interest rates. These revisions indicate the Fed's new monetary framework has shifted its focus from prioritizing employment to balancing inflation and employment. Markets may have misjudged the pace of Fed rate cuts, with actual reductions this year potentially falling short of expectations. As markets have already heavily priced in a December rate cut, adjustments to future rate cut expectations will exert downward pressure on LME lead prices from mid-term macro factors.

Tightening Ore Supply

Primary Lead Output Shows Steady Decline

Regarding overseas mines, while operations like Endeavor, Gamsberg, Saucito, and Chungar have ramped up production or expanded ore processing capacity to boost output, multiple mines have reduced production due to declining ore grades. Major mining companies such as Teck, Newmont, and South32 have all indicated varying degrees of production cuts in their 2025 guidance compared to 2024, suggesting overseas refined lead concentrate supply remains tight. Consequently, starting in the second half of the year, the year-on-year growth rate of domestic ore imports began to narrow, with import volumes expected to provide only limited supplementation.

Domestically, although mining profits remain high, further production increases are constrained as domestic mines have reached capacity bottlenecks. As temperatures drop, increased mining costs in northern mines may lead to a decline in operating rates from current high levels, making the downward trend in domestic ore supply increasingly evident.

Overall, both domestic and imported ore volumes show a month-on-month decline. Considering increased ore demand from smelters for winter stockpiling, the ore supply-demand structure is expected to tighten, with processing fees continuing their downward trend.

From the smelting perspective, anticipating tightening raw material supplies, some smelters have initiated winter stockpiling plans early. Consequently, ore supply constraints may further limit primary lead production. However, amid heightened global risk aversion, by-product prices are likely to remain elevated. Driven by smelting margins, primary lead enterprises' operating rates may stay at relatively high levels seen in recent years, making significant declines in primary lead output unlikely.

Overall, in the near to medium term, tightening raw material supply coupled with elevated by-product prices is expected to result in a modest decline in primary lead output.

Medium-Term Supply Disruptions Persist for Recycled Lead

Regarding raw materials, limited scrap battery supply is anticipated due to reduced subsidies for electric bicycle “trade-in” programs in some regions, coupled with concentrated restarting of recycled lead smelters in the short term. As temperatures drop, demand for automotive battery replacements will increase. However, it should be noted that smog, rain, and snow in northern regions may hinder the circulation of scrap batteries, potentially leading to seasonal price increases. Therefore, scrap battery prices are more likely to rise than fall.

Recently, with domestic lead prices remaining strong while international prices weakened, the import window has opened. Recycled lead smelters have imported crude lead to supplement raw materials, which may gradually arrive at ports in the short term. Considering potential production disruptions from environmental restrictions during northern heating seasons, the import window may reopen later.

From the smelting perspective, recycled lead smelters have faced severe raw material shortages this year, operating in a cycle of “losses and shutdowns due to shortages → accumulation of raw material inventories → resumption of production when profits recover.” With the recovery of recycling profits, the replenishment of raw materials through imported crude lead, and the accumulation of scrap battery inventories during production halts, a large-scale resumption of production by recycling plants is expected in the near term. However, raw material supply constraints persist. As heating season begins in northern regions, the risk of environmental production restrictions increases, and recycling supply is projected to decline again.

Export orders decline  Limited demand support

From the perspective of end-user demand, the phasing out of subsidies for “trade-in” policies in some regions and the gradual end of the peak season for electric bicycle consumption have led to a noticeable weakening in demand for electric bicycles. Additionally, subsidies for automobiles are also being phased out. With the launch of new models and automakers pushing sales volume through promotions, year-on-year and month-on-month growth in automobile sales is expected to narrow compared to previous periods.

Regarding the lead-acid battery segment, the primary recent demand driver has been production line adjustments by manufacturers to supply batteries for new e-bike models compliant with national standards. Further growth in product replacement demand is unlikely. While colder weather may boost automotive battery replacements, year-on-year growth in vehicle-specific batteries is expected to slow, limiting expansion in the automotive battery sector. Additionally, export orders may decline due to earlier export rushes depleting demand and unfavorable domestic-international price differentials. Consequently, limited growth potential on the demand side suggests lead-acid battery production will likely maintain moderate growth.

Overall, primary lead production remains largely stable. The primary variable on the supply side is recycled lead output. On the demand side, amid domestic subsidy reductions and unfavorable price differentials, overall growth is expected to remain moderate. In the short term, as recycled lead smelters resume operations en masse, the supply-demand structure for lead ingots will ease, potentially causing lead prices to fluctuate downward. However, with increased supply disruptions from recycled lead following the heating season in northern regions, lead prices are expected to resume an upward trajectory.

As an integrated internet platform providing benchmark prices, on November 13, the benchmark price of lead on SunSirs was 17,410.00 RMB/ton, an increase of 0.89% compared with the beginning of the month (17,256.00 RMB /ton).

Application of SunSirs Benchmark Pricing：

Traders can price spot and contract transactions based on the pricing principle of agreed markup and pricing formula (Transaction price=SunSirs price + Markup).

If you have any inquiries or purchasing needs, please feel free to contact SunSirs with support@sunsirs.com.