SMM

According to customs data, in November 2024, refined lead exports totaled 2,110 mt, up 11.84% MoM but down 85.44% YoY. From January to November, the combined exports of refined lead and lead materials amounted to 39,978 mt, down 78.93% YoY. In November 2024, refined lead imports totaled 815 mt, while lead alloy imports reached 8,125 mt. From January to November, the combined imports of refined lead and lead materials amounted to 206,398 mt, up 333.16% YoY.

In November, domestic supply and demand for lead ingots both increased. The operating rate of domestic primary lead smelting enterprises was 75.48%, up 2.58 percentage points MoM. The operating rate of secondary lead smelting enterprises was 44.9%, up 1.09 percentage points MoM. The comprehensive capacity utilisation rate of lead-acid battery enterprises was 75.26%, up 5.11 percentage points MoM and 4.17 percentage points YoY. Additionally, with the impact of temporary smog-driven production restrictions, domestic and international lead prices fluctuated upward, with the overall price center shifting higher.

Specifically, the most-traded SHFE lead 2501 contract rose from 16,570 yuan/mt at the beginning of the month to above 17,000 yuan/mt, peaking at 17,470 yuan/mt. In contrast, there was a significant divergence between overseas and domestic markets. In November, LME lead inventory increased by 82,400 mt, with a sharp rise of over 90,000 mt during two consecutive trading days in mid-November. LME lead prices also dropped to a monthly low of $1,948.5/mt. Both refined lead exports and imports in November were lackluster.

Last Monday, the SHFE lead 2412 contract was delivered, with a total delivery volume of 16,000 mt, falling short of 20,000 mt. As the year-end approaches, suppliers are more inclined to sell spot cargoes to recover funds, leading to a significant reduction in delivery volumes. The latest SMM data shows that social inventory of lead ingots stands at 58,500 mt. Due to environmental protection-driven production restrictions or transportation constraints, the lead ingot transportation cycle has slowed, and downstream sectors may turn to consuming social inventory. Weekly in-plant inventory at secondary lead smelters has now dropped to a historical low, below 10,000 mt.

Earlier this month, LME lead inventory reached as high as 270,000 mt and is now around 255,000 mt. Attention should be paid to changes in the SHFE/LME price ratio and the potential opening of the lead ingot import window. Regarding imported lead, recently, we learned that there are no quotes for imported lead in the market, nor has there been significant trading activity. The main reasons are the sharp decline in SHFE lead prices during the week and poor import profitability, which have delayed the opening of the import window, leaving the market in a wait-and-see sentiment.