Chinese lead prices fluctuated frequently this week, with the overall price center moving lower than last week. The weekly average spot price of primary lead in China was Yuan 16,350/tonne, down by 0.80% week on week, and the average spot price of secondary lead was Yuan 16,275/tonne,down by 0.84% week on week. Meanwhile, the average closing price of SHFE lead was Yuan 16,443/tonne, down by 0.31% week on week. During the same period, the average closing price of LME lead was $1,899/tonne, decreasing by 0.54% week on week.
On the macro front, the clearest ceasefire signal since the start of U.S.-Iran military actions emerged from the White House on March 24. The U.S. President Donald Trump stated publicly that substantial progress had been made in ending the war with Iran. However, military actions on both sides could still escalate, and Iran has yet to give a final response to the U.S.'s 15-point ceasefire plan. The uncertain geopolitical situation led to shifting market sentiment, which in turn caused significant volatility in commodity prices this week.
From a fundamental perspective, production at primary lead enterprises has been steadily increasing recently, while the recovery in secondary lead production has been slower. Additionally, a large secondary lead enterprise in Jiangsu plans to halt production for maintenance by the end of March, and other smelters also have plans for maintenance or output reductions due to sustained losses. As a result, overall supply expectations remain relatively tight. In terms of spot trading, downstream lead-acid battery enterprises purchased on dips when lead prices were low earlier this week, but adopted a wait-and-see stance as prices later rebounded. Overall, spot trading activity for lead ingots was moderate this week.
Regarding inventory, given weak supply and a moderate improvement in demand, China's retail inventory of lead ingots continued to decline this week. As of March 26, lead ingot retail inventory in major Chinese markets stood at 57,600 tonnes, down by 5,500 tonnes from March 23 and 15,000 tonnes from March 19.
Looking ahead, downstream lead-acid battery enterprises are unlikely to significantly increase procurement in the near term. Meanwhile, as smelter maintenance gradually ramps up, spot supply in the lead ingot market is expected to tighten further, keeping retail inventories on a downward trend. Overall, the inflow of imported lead ingots, limited improvement in downstream demand, and macroeconomic disruptions are expected to keep lead prices range-bound at low levels in the short term.
Written by Zhaorui Cui, cuizhaorui@mysteel.com
Edited by Mingyuan Wang, wangmingyuan@mysteel.com
