SunSirs: Lead Prices Continued to Weaken Last Week (January 26-30)

Price trend

According to monitoring data from SunSirs' commodity price analysis system: As of January 30th, the price of 1# lead was 16,735 RMB/ton, a decrease of 1.65% compared to the price of 17,051 RMB/ton on January 26th.

Market analysis

Recently, lead prices have generally shown a volatile downward trend, a movement primarily influenced by weak supply and demand as well as overall weak macroeconomic market sentiment.

Supply side

Smelting Production Reduction

Affected by environmental protection policies, some lead smelting enterprises in Central and East China have experienced production cuts, with reductions reaching 30%, and some companies have even suspended operations entirely. This situation has led to a tightening of supply in some regions, which has helped to alleviate the pressure of excess lead ingot inventory. However, overall, the supply of lead remained relatively abundant.

Raw material supply disrupted

The market for used batteries was temporarily facing a shortage of supply, which was affecting the supply of raw materials for recycled lead producers, resulting in reduced raw material deliveries. As a result, some recycled lead companies chose to start their holidays early, further suppressing the supply of lead.

Demand side

The demand for batteries in the electric bicycle sector was showing signs of weakness. Lead-acid battery manufacturers were facing a serious backlog of finished goods inventory, and there was low willingness to stock up before the Spring Festival, with only a small amount of essential demand purchasing.

Exports were facing pressure, and due to changes in overseas tariff policies, export orders declined, resulting in overall weak demand.

Comprehensive analysis

In the short term, lead prices are likely to continue to fluctuate weakly. Production cuts on the supply side will provide some support to prices, but weak demand and inventory pressure will still limit the potential for a rebound. With the Lunar New Year holiday approaching, it is necessary to be vigilant about the further impact of declining supply and demand on market sentiment.

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