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Cost Support vs. Off-Season Consumption, Lead Prices Continue to Consolidate [SMM Lead Morning Meeting Summary]

  • Apr 22, 2025, at 12:55 am
SMM Lead Morning Meeting Summary: Cost Support vs. Consumption Off-Season, Lead Prices Continue to Fluctuate and Consolidate. Scrap battery prices continue to rise, secondary lead companies are in a loss-making state, secondary lead smelters' production willingness declines, and suppliers stand firm on quotes and are reluctant to sell—in some regions, secondary refined lead quotations against the SMM 1# lead average price are at parity ex-factory, downstream just-in-time procurement leans towards primary lead. Just before the Labour Day holiday, coinciding with the traditional consumption off-season, battery companies' stockpiling enthusiasm is moderate, and spot market trading is sluggish...

Futures market:

Overnight, LME lead was closed due to the Easter holiday.

Overnight, the most-traded SHFE lead 2506 contract opened at 17,085 yuan/mt, initially fell to a low of 16,940 yuan/mt, then consolidated above the 16,950 yuan/mt level, and finally closed at 16,955 yuan/mt, up 15 yuan/mt, or 0.09%. On the macro front, Trump once again urged the US Fed to cut interest rates, and the US dollar fell to its lowest level in three years on Monday.

Click to view SMM lead spot historical quotes

Spot fundamentals:

In the Shanghai market, Chihong lead was quoted at 17,000-17,020 yuan/mt, with premiums of 80-100 yuan/mt against the SHFE 2505 contract; Jijin lead was quoted at 16,940-16,950 yuan/mt, with premiums of 20-30 yuan/mt against the SHFE 2505 contract. In the Jiangsu-Zhejiang region, JCC lead was quoted at 16,950-16,970 yuan/mt, with premiums of 30-50 yuan/mt against the SHFE 2505 contract. SHFE lead continued its upward trend, and suppliers followed the market to sell. The premiums of warrant cargoes remained largely unchanged from last Friday, while the discounts of ex-factory primary lead smelter cargoes further widened. The mainstream producing areas quoted primary lead at discounts of 70-120 yuan/mt against the SHFE 2505 contract ex-factory, and secondary refined lead at discounts of 100-0 yuan/mt against the SMM 1# lead average price ex-factory. Downstream enterprises were not active in purchasing at month-end, with fewer inquiries, and only some made just-in-time procurement. Inventory: According to SMM, as of April 21, the total social inventory of lead ingots in five regions was 54,600 mt, down 12,000 mt from April 14; down 8,300 mt from April 14.

Today's lead price forecast:

Recently, lead prices have held up well, and suppliers were active in selling. After the spread between futures and spot prices narrowed relatively, suppliers were more inclined to sell ex-factory cargoes. At the same time, the previous round of lead ingot delivery cargoes re-entered the market, and the inventory in social warehouses in Jiangsu, Zhejiang, and Tianjin regions decreased significantly. Scrap battery prices continued to rise, and secondary lead enterprises were in a loss-making state, with secondary lead smelters' production willingness declining. Suppliers stood firm on quotes and were reluctant to sell—in some regions, secondary refined lead was quoted at parity against the SMM 1# lead average price ex-factory, and downstream just-in-time procurement leaned towards primary lead. Before the Labour Day holiday, which coincided with the traditional consumption off-season, battery companies' stockpiling enthusiasm was moderate, and spot market trading was light. The cost of secondary refined lead provided bottom support for lead prices, and short-term lead prices may continue to consolidate.

Click to view SMM metal industry chain database

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