According to monitoring by the SunSirs Commodity Market Analysis System, as of March 27, the price of 1# lead stood at 16,405 RMB/ton—marking an upward fluctuation of 0.28% compared to the price of 16,360 RMB/ton recorded on March 23.

Last Week's Market Analysis

The domestic lead market was exhibiting a steady trend characterized by narrow, upward-leaning fluctuations and a slight elevation in its price center. Both Shanghai lead futures and spot prices were advancing moderately in tandem, without experiencing any violent volatility. Market dynamics were primarily driven by four key factors: rigid raw material costs, tight supplies of recycled lead, the depletion of social inventories, and restocking driven by rigid downstream demand. Overall, the market was situated in a state of equilibrium between bullish and bearish forces, underpinned by strong support at the bottom.

Raw Materials

Primary Lead: Lead concentrate supply remained tight, with processing fees trading at low levels and in negative territory.

Domestic lead concentrate TC (processing fees) stood at 250 RMB per metal ton, while import TCs ranged from -135 to -145 USD per dry ton—a persistent inversion. Domestic mines were slow to resume production, and imports were being disrupted by shipping issues from Australia and geopolitical disturbances; consequently, the overall supply of mine-side raw materials remained tight. Smelters were adopting a cautious approach to raw material procurement, focusing primarily on restocking to meet immediate operational needs rather than building up large-scale inventories; this created rigid support on the cost side.

Recycled Lead: Scrap Battery Prices Remained Firm, Smelting Operations Faced Severe Losses

Recycled lead smelters were generally experiencing severe losses (exceeding 800 RMB/ton); operating rates stood at a mere 30–40%, with production cuts and shutdowns occurring across numerous regions. The resulting contraction in recycled lead output and the reduction in spot market circulation had emerged as a critical floor of support for lead prices.

Supply and Demand

Primary lead remained stable while secondary lead was weak, resulting in an overall tight market. Regarding primary lead, smelters in Yunnan and Hunan were gradually resuming production; however, operating rates stood at only 60%–65%, leading to a modest recovery in output. As for secondary lead, production restarts were constrained by financial losses; with a weekly operating rate of 39.57%, the increase in supply remained limited. Social inventories had seen a slight drawdown from recent highs, while smelter inventories remained low, resulting in tight liquidity within the spot market. Smelters were reluctant to sell at low prices and demonstrated a strong resolve to support price levels; consequently, the availability of low-priced goods in the market was diminishing rapidly.

Demand for batteries remained stable, with a modest recovery observed during the peak season. Operating rates among downstream lead-acid battery manufacturers stood at 73%-74%, representing a slight month-on-month uptick. The procurement patterns were characterized by small-volume orders, purchases driven solely by immediate necessity, and a "buy-as-needed" approach; while buyers remained wary of high prices, they had not withdrawn from the market entirely. The absence of any concentrated inventory restocking was serving to cap price gains.

Market outlook

In the short term, lead prices are expected to remain range-bound with a bullish bias; downside potential is limited, while upside potential is capped. Key factors to monitor are operating rates in the recycled lead sector and the prices of scrap batteries: if losses narrow, supply will rebound, placing downward pressure on lead prices; conversely, prices will tend to strengthen.

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