May 19, the spot lead market exhibited a pattern of initial decline followed by stabilization, characterized by narrow-range fluctuations. The supply of raw materials for recycled lead remains tight, compounded by firm prices for scrap batteries; consequently, cost-side support is robust. However, downstream demand for lead-acid batteries is currently in its traditional off-season, resulting in sluggish trading activity. With price volatility constrained, the market is generally maintaining a low-level consolidation trend.
I. Spot Market Performance
SunSirs Benchmark Price: On May 19, the benchmark price for spot lead stood at 16,340.00 RMB/ton—a slight decline of 0.46% compared to May 18 (16,415.00 RMB/ton). The cumulative decline for the month to date has reached 2.1%.
Regional Spot Quotes
Shanghai Spot Market: Quotes for #1 lead ingots ranged from 16,275 to 16,330 RMB/ton, with an average price of 16,300 RMB/ton—unchanged from yesterday.
Guangdong Nanchu Market: Quotes for #1 lead ingots ranged from 16,300 to 16,350 RMB/ton; trading activity was moderate.
Major Domestic Smelters: Ex-factory prices ranged from 16,250 to 16,300 RMB/ton, reflecting a strong inclination to hold prices firm.
II. Domestic and International Capacity, Output, and Imports
Domestic Supply
By 2026, the total domestic capacity for refined lead is projected to reach approximately 6.5 million tons, comprising 3.5 million tons of primary lead capacity and 3.0 million tons of recycled lead capacity. In May, the operating rate at domestic primary lead smelters remained steady at 75%, yielding a monthly output of approximately 220,000 tons. In contrast, the operating rate for recycled lead smelters stood at only 45%—due to stricter environmental regulations and a shortage of collected scrap batteries—resulting in a monthly output of approximately 100,000 tons, a significant month-on-month decline. From January through April, the cumulative domestic output of refined lead totaled 1.28 million tons, representing a year-on-year decrease of 1.2%. **Global Supply and Import Volumes**
The total global refined lead production capacity stands at approximately 12 million tons, with overseas capacity concentrated in Asia, the Americas, and Europe. In May, the operating rate of overseas refineries was around 60%; production in certain regions was constrained due to maintenance shutdowns and tight raw material supplies.
Regarding imports, China's cumulative imports of lead ingots from January to April totaled approximately 120,000 tons, a year-on-year decrease of 18%. Arrivals in May are projected at 30,000 tons, representing a slight month-on-month decline; the import window remains closed—due to an inverted price spread between domestic and international markets—resulting in limited inflows of overseas material.
III. Inventory Status
As of mid-May, domestic social inventories of lead ingots stood at approximately 180,000 tons—a month-on-month decrease of 12,000 tons and a year-on-year decline of 22%—marking a low point for the year. Of this total, inventories in the Shanghai region amounted to 80,000 tons, and in the Guangdong region to 60,000 tons, with the remainder dispersed across North China, East China, and other areas. The continued depletion of inventories was primarily driven by a contraction in recycled lead production and downstream restocking to meet essential needs; however, weak demand during the traditional off-season resulted in a slower pace of inventory reduction. Overseas LME lead inventories remained at a high level of approximately 80,000 tons, highlighting a distinct divergence in inventory patterns between domestic and international markets.
IV. Factors Influencing Prices
1. Cost Side
Prices for scrap batteries—the primary raw material for recycled lead—remained at a high range of 9,800–10,200 RMB/ ton. Heightened environmental protection standards have driven up recycling costs, pushing the production cost for recycled lead to approximately 15,800–16,000 RMB/ ton, thereby establishing a strong cost floor. Regarding primary lead, processing fees for lead concentrates remain at low levels, while smelting costs remain rigid, effectively limiting the downside potential for lead prices.
2. Supply and Demand Dynamics
On the supply side, recycled lead production has contracted significantly, while primary lead production has remained stable with slight growth; consequently, overall supply remains relatively tight. On the demand side, the market is currently in its traditional off-season; battery manufacturers are focusing primarily on purchasing to meet immediate operational needs rather than engaging in large-scale restocking, resulting in a state of weak but tight equilibrium between supply and demand.
3. Policy and Substitution
Domestic environmental enforcement within the recycled lead industry remains ongoing, leading to the closure of small-scale recycling sites and restricted raw material supplies. Concurrently, rising overseas trade barriers have hindered the export of batteries. Furthermore, the substitution of lead-acid batteries by lithium-ion batteries continues; however, the implementation of new national weight standards for two-wheeled vehicles—which includes relaxed weight limits—has partially offset this substitution pressure. 4. Macroeconomics and Logistics
The U.S. dollar has exhibited volatile movements, and prevailing macroeconomic sentiment remains cautious, thereby dampening a potential rebound in industrial metals. Domestically, logistics operations remain stable; regional price spreads are holding within a reasonable range, and inter-regional cargo flows are proceeding smoothly.
5. Downstream Product Sales and Procurement Activity
Lead-acid batteries constitute the core downstream sector for lead, accounting for over 80% of total lead consumption; the remainder is utilized in applications such as lead alloys and anti-corrosion materials.
Procurement Activity: Downstream battery manufacturers currently demonstrate a weak inclination toward purchasing. Activity is dominated by long-term contracts covering essential requirements, with only sporadic restocking taking place. Stockpiling enthusiasm remains low, resulting in subdued trading volume.
Product Sales: Sales of batteries for electric two-wheelers, automotive starter batteries, and energy storage systems have been lackluster. Terminal demand remains sluggish, and distributor inventories are running high. Consequently, promotional campaigns are being launched across various regions, placing downward pressure on prices. Demand for communication base station batteries remains stable, providing support for a portion of essential requirements. Overall, downstream product sales lack strong momentum, and the characteristics of a typical "off-season" are clearly evident.
6. Future Market Outlook
On the cost side, firm prices for scrap batteries provide a solid floor of support; on the supply side, a contraction in recycled lead output lends support to prices. However, weak downstream demand—characteristic of the off-season—will limit the potential for a rebound, resulting primarily in a phase of volatile consolidation.
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