Price Trend

In May 2019, the domestic 1 Lead Ingot Market fluctuated lower. The average price of domestic market was 16762.50 yuan/ton at the beginning of the month and 16200 yuan/ton at the end of the month, a decline of 3.36%.

The lead commodity index on June 3 was 98.59, unchanged from yesterday, down 26.43% from the cyclical peak of 134.01 (2016-11-29), and up 32.11% from the lowest point of 74.63 on March 19, 2015. (Note: Period refers to 2011-09-01 to date).

II. Market Analysis

Domestic market: The spot lead market in eastern China has declined as a whole, mainly affected by environmental protection in May. 25 provinces and municipalities directly under the Central Government have been affected by the shutdown of some manufacturers, and some manufacturers have been repaired. The overall market is weak. The price fell below 16,000 yuan in the middle of the month, and recovered to 16,000-16200 range after 15,950 yuan/ton hovering.

Supply and demand: According to data released Wednesday by the International Lead and Zinc Research Group (ILZSG), the global lead market oversupply expanded from 3,600 tons in February to 10,300 tons in March.

According to data released by the World Bureau of Metal Statistics (WBMS) on May 22, the global lead market supply gap was 119,000 tons in January-March 2019 and 278,000 tons in the whole year of 2018. Total inventory at the end of March was 7,000 tons lower than at the end of 2018. Unreported inventory changes are not included in consumption statistics. From January to March 2019, the global production of refined lead was 3.09 million tons, an increase of 6.6% over the same period last year. From January to March, China’s apparent demand is estimated to be 1486,000 tons, an increase of 242,000 tons over the same period last year, accounting for about 46% of the global total. From January to March, the US’s apparent demand increased by 10,000 tons over the same period last year. In March 2019, global refined lead production was 104.89 million tons and consumption was 109.93 million tons.

Domestic events:

Battery industry is at high risk! Eight lead-acid plants were shut down in one month, and the quality of lithium batteries was mixed. The introduction of the new national standard for electric vehicles is a fatal blow to the whole vehicle enterprise. A large number of businessmen shut down and the speed of brand shuffling is accelerated. But for the battery industry, the most important part of electric vehicles, there are two days of ice and fire.

Shanghai Municipal Lead Accumulator Regional Collection and Transportation Pilot Work Program: Shanghai Municipal Bureau of Ecology and Environment and Municipal Transportation Bureau recently issued the “Shanghai Municipal Lead Accumulator Regional Collection and Transportation Pilot Work Program”. According to the plan, by 2020, the city’s lead accumulator centralized collection and trans-regional transport system was initially established to effectively prevent and control the environmental risk of waste lead accumulator. The standard recovery rate of lead-acid batteries (i.e. the ratio of the collection of waste lead-acid batteries to the renewal sales of lead-acid batteries) is over 40%.

3. Prospects for the Future Market

In May, Lun lead fell, while Shanghai lead slightly declined. With the reduction of demand from recycling manufacturers, the price of waste batteries also declined. With the arrival of the batteries replacement season in June, and many manufacturers will resume production, the willingness of batteries to purchase raw materials will also be better than the previous period. It is expected that the lead market will be mainly shocked in June.