Report Industry Investment Rating - Not provided in the content Core Viewpoints - Although the visible inventory of lead ore has further increased and is higher than the same period in previous years, the high by - product profit suppresses the further decline of lead concentrate TC. The primary smelting start - up rate has slightly declined but remains at a high level, while the secondary smelting start - up rate has increased marginally. The finished product inventories of primary and secondary smelting plants and the social inventory of lead ingots have all increased, indicating a weak industrial situation. However, it is worth noting that the lead price has declined with the ebb of the non - ferrous metal sentiment. After the winter temperature drops, the transportation of waste batteries is blocked, the raw materials for secondary smelting have tightened, and the secondary smelting profit calculated based on spot orders is marginally under pressure. It is expected that the surplus of lead ingots will decrease marginally [11] Summary by Directory 1. Weekly Assessment - Price Review: Last Friday, the Shanghai Lead Index closed down 0.23% at 17,106 yuan/ton, with a total unilateral trading position of 103,000 lots. As of 15:00 last Friday, LME Lead 3S fell 6 to 2,026 dollars/ton compared with the same period of the previous day, with a total position of 167,200 lots. The average price of SMM 1 lead ingots was 16,950 yuan/ton, the average price of secondary refined lead was 16,825 yuan/ton, the refined - scrap price difference was 125 yuan/ton, and the average price of waste electric vehicle batteries was 10,025 yuan/ton [11] - Domestic Structure: The futures inventory of lead ingots on the Shanghai Futures Exchange was 28,000 tons. According to Steel Union data, the social inventory of lead ingots in major domestic markets on January 22 was 34,200 tons, an increase of 4,800 tons from January 19. The domestic primary basis was - 140 yuan/ton, and the spread between the continuous contract and the first - month contract was - 60 yuan/ton. Overseas Structure: The LME lead ingot inventory was 218,400 tons, and the LME lead ingot cancelled warrants were 31,400 tons. The overseas cash - 3S contract basis was - 45.02 dollars/ton, and the 3 - 15 spread was - 127.1 dollars/ton. Cross - market Structure: After excluding exchange rates, the on - screen Shanghai - London ratio was 1.219, and the import profit and loss of lead ingots was 201.44 yuan/ton [11] - Industrial Data: At the primary end, the port inventory of lead concentrate was 49,000 tons, and the factory inventory was 493,000 tons. The import TC of lead concentrate was - 150 dollars/dry ton, and the domestic TC of lead concentrate was 250 yuan/metal ton. The primary smelting start - up rate was 66.9%, and the factory inventory of primary lead ingots was 40,400 tons. At the secondary end, the waste lead inventory was 93,000 tons, the secondary smelting start - up rate was 49%, and the factory inventory of secondary lead ingots was 22,800 tons. At the demand end, the start - up rate of lead - acid batteries was 70.77% [11] 2. Primary Supply - Import Data: In December 2025, the net import of lead concentrate was 149,200 physical tons, with a year - on - year change of 24.63% and a month - on - month change of 35.87%. From January to December, the cumulative net import of lead concentrate was 1,425,300 physical tons, with a cumulative year - on - year change of 15.11%. In December 2025, the net import of silver concentrate was 239,300 physical tons, with a year - on - year change of 89.27% and a month - on - month change of 31.21%. From January to December, the cumulative net import of silver concentrate was 1,931,000 physical tons, with a cumulative year - on - year change of 13.6% [15] - Production Data: In December 2025, China's lead concentrate production was 126,300 metal tons, with a year - on - year change of 4.04% and a month - on - month change of - 7.54%. From January to December, the total production of lead concentrate was 1,658,200 metal tons, with a cumulative year - on - year change of 9.89%. In December 2025, the net import of lead - containing ores was 185,200 metal tons, with a year - on - year change of 51.34% and a month - on - month change of 33.42%. From January to December, the cumulative net import of lead - containing ores was 1,627,700 metal tons, with a cumulative year - on - year change of 14.39% [17] - Total Supply: In December 2025, the total supply of lead concentrate in China was 311,500 metal tons, with a year - on - year change of 27.78% and a month - on - month change of 13.11%. From January to December, the cumulative supply of lead concentrate was 3,285,900 metal tons, with a cumulative year - on - year change of 12.07%. In October 2025, the overseas lead ore production was 256,800 tons, with a year - on - year change of - 3.39% and a month - on - month change of 6.60%. From January to October, the total production of lead ore was 2,407,700 tons, with a cumulative year - on - year change of - 2.35% [19] - Inventory and TC: The port inventory of lead concentrate was 49,000 tons, and the factory inventory was 493,000 tons. The import TC of lead concentrate was - 150 dollars/dry ton, and the domestic TC of lead concentrate was 250 yuan/metal ton [21][23] - Smelting: The primary smelting start - up rate was 66.9%, and the factory inventory of primary lead ingots was 40,400 tons. In December 2025, China's primary lead production was 332,700 tons, with a year - on - year change of 1.56% and a month - on - month change of 1.56%. From January to December, the total production of primary lead ingots was 3,847,200 tons, with a cumulative year - on - year change of 6.32% [26] 3. Secondary Supply - Raw Materials and Production: The waste lead inventory at the secondary end was 93,000 tons. The secondary smelting start - up rate was 49%, and the factory inventory of secondary lead ingots was 22,800 tons. In December 2025, China's secondary lead production was 354,500 tons, with a year - on - year change of 10.3% and a month - on - month change of - 5.04%. From January to December, the total production of secondary lead ingots was 3,962,900 tons, with a cumulative year - on - year change of 4.52% [31][33] - Trade and Total Supply: In December 2025, the net export of lead ingots was - 28,600 tons, with a year - on - year change of 111.23% and a month - on - month change of 25.65%. From January to December, the cumulative net export of lead ingots was - 146,700 tons, with a cumulative year - on - year change of - 22.13%. In December 2025, the total domestic supply of lead ingots was 715,800 tons, with a year - on - year change of 8.04% and a month - on - month change of - 1.09%. From January to December, the cumulative domestic supply of lead ingots was 7,956,800 tons, with a cumulative year - on - year change of 4.72% [35] 4. Demand Analysis - Battery Demand: At the demand end, the start - up rate of lead - acid batteries was 70.77%. In December 2025, the apparent domestic demand for lead ingots was 719,800 tons, with a year - on - year change of 5.09% and a month - on - month change of - 0.44%. From January to December, the cumulative apparent domestic demand for lead ingots was 7,969,100 tons, with a cumulative year - on - year change of 4.27% [40] - Battery Exports: In December 2025, the net export volume of lead - containing lead - acid batteries was 1,664,900 units, with a year - on - year change of - 35.22% and a month - on - month change of 8.81%. From January to December, the total net export of batteries was 213 million units, with a cumulative net export year - on - year change of - 13.06% [43] - Inventory: In December 2025, the finished product inventory days of lead - acid batteries in factories increased from 20.9 days to 21.5 days, and the inventory days of lead - acid batteries in dealers increased from 40.7 days to 43.6 days [45] - Terminal Demand: In the two - wheeled vehicle sector, although the decline in electric bicycle production directly dragged down the new installation demand, the continuous growth of delivery scenarios such as express delivery and takeaway drove the improvement of the new installation consumption of electric two - and three - wheeled vehicles. In the automobile sector, the contribution of lead demand is expected to maintain stable growth. Although new energy vehicles are gradually replacing lead - acid start - up batteries, the high stock of existing vehicles still provides support for lead consumption. In the base station sector, the increasing number of communication base stations and 5G base stations drives the steady increase in the demand for lead - acid batteries [50][52][55] 5. Supply - Demand Inventory - Domestic Balance: In December 2025, the domestic supply - demand gap of lead ingots was a shortage of 4,000 tons. From January to December, the cumulative domestic supply - demand gap of lead ingots was a shortage of 12,400 tons [64] - Overseas Balance: In October 2025, the overseas refined lead supply - demand gap was a surplus of 5,400 tons. From January to October, the cumulative overseas refined lead supply - demand gap was a surplus of 98,400 tons [67] 6. Price Outlook - Domestic Structure: The futures inventory of lead ingots on the Shanghai Futures Exchange was 28,000 tons. According to Steel Union data, the social inventory of lead ingots in major domestic markets on January 22 was 34,200 tons, an increase of 4,800 tons from January 19. The domestic primary basis was - 140 yuan/ton, and the spread between the continuous contract and the first - month contract was - 60 yuan/ton [72] - Overseas Structure: The LME lead ingot inventory was 218,400 tons, and the LME lead ingot cancelled warrants were 31,400 tons. The overseas cash - 3S contract basis was - 45.02 dollars/ton, and the 3 - 15 spread was - 127.1 dollars/ton [74] - Cross - Market Structure: After excluding exchange rates, the on - screen Shanghai - London ratio was 1.215, and the import profit and loss of lead ingots was 192.55 yuan/ton [77] - Position: The net long position of the top 20 in Shanghai Lead decreased, the net long position of investment funds in LME Lead increased, and the net short position of commercial enterprises increased. From the perspective of positions, it is short - term bearish [80]

Report Industry Investment Rating - The rating for Shanghai lead is "volatile", with a wide - range oscillation mainly within the range of 16,800 - 18,500 yuan/ton [3][4][71]. Core Viewpoints of the Report - The cost support from waste batteries and demand limit the upside of lead prices. In the second quarter, lead prices may shift to wide - range oscillations. However, due to the persistent shortage of raw materials, the probability of a sharp decline in lead prices in the second quarter is low. It is advisable to adopt a low - buying strategy in the medium - term, and pay attention to the actual performance and sustainability of replacement demand and energy storage increments [4][71]. Summaries According to Related Catalogs 1. Market Performance in Q1 2025 - Lead prices showed a generally bullish trend in Q1 2025, with two cycles of "sustained rise and periodic sharp decline". After the Spring Festival, lead prices soared due to expectations of demand recovery and low inventory accumulation in the industry chain, then fluctuated around 17,000 yuan/ton. Subsequently, there were sharp declines and rebounds due to various factors such as rumors of downstream production cuts, inventory accumulation, and changes in supply - demand relationships [5][8]. 2. Overseas Lead Mine Supply - In 2024, the global lead concentrate production was basically flat year - on - year. In Q1 2025, overseas disturbances decreased significantly, and production was expected to be basically flat quarter - on - quarter. In Q2 2025, there might be an obvious recovery due to the low base in the previous year. The expected overseas lead mine increment in 2025 is about 103,000 metal tons, but the improvement will be less than that of zinc [12][13][14]. 3. Domestic Lead Mine Supply - In 2024, the domestic lead mine shifted from shortage to tight balance. It is expected that the domestic lead mine increment in 2025 will be about 20,000 metal tons, mainly in the second half of the year. In Q1, the lead concentrate import window remained open, and in Q2, imports may decrease quarter - on - quarter but increase year - on - year. The TC has an expectation of increase in the medium - term, but the increase is highly limited [20][24]. 4. Domestic Primary Lead Production - Overseas primary lead production in 2024 was 1.454 million tons (YoY + 1%), and in January 2025, the global lead market had a supply surplus of 1,000 tons. Domestic primary lead production from January to February was 568,000 tons (YoY - 0.2%), and in March, production increased significantly by 40,000 - 50,000 tons. In Q1 2025, production was expected to be 913,000 tons (YoY + 5.7%). In Q2, there is an expectation of raw material inventory consumption, and it is difficult to repair smelting profits [28]. 5. Domestic Secondary Lead Production - It is estimated that the secondary lead production in Q1 2025 was 725,000 tons (YoY - 6.4%). Waste batteries are expected to be in a more severe shortage in 2025 compared to last year. With the operating loss of secondary lead smelters, there is a possibility of large - scale production cuts in the second quarter when demand weakens [36][47]. 6. Lead Demand - **Initial - stage demand**: After the Spring Festival, the start - up of battery enterprises was generally lower than expected. In April, the traditional lead - acid battery demand entered the off - season, and it is necessary to pay attention to the production arrangements of large enterprises in the future. Energy storage batteries showed obvious growth, and lead - carbon battery manufacturers had sufficient production orders [49][51]. - **Terminal demand**: In Q1, terminal demand may have reached its peak and will weaken marginally in Q2. Electric two - wheelers' replacement demand has recovered due to policies, but the lithium - for - lead substitution process may continue in the long - term. The automotive market was strong in Q1 but weakened in Q2. The communication base station equipment production decreased in 2024 and is expected to improve in 2025. Energy storage will contribute obvious increments [52][58]. - **Overseas demand**: The export of lead - acid batteries in 2024 slowed down. From January to February 2025, exports declined significantly. It is expected that the annual export growth rate of batteries will be adjusted down to - 1%. Exports to Belt and Road countries may increase quarter - on - quarter in Q2 [59]. 7. Inventory and Import - **LME inventory**: There was a concentrated delivery in the LME in mid - March, and the overseas consumption capacity of lead ingots remains weak. - **Domestic social inventory**: After the Spring Festival, the supply recovery rate exceeded demand, and the social inventory is currently at a seasonally neutral - to - high level. In April, social inventory may continue to rise in the short - term. - **Lead ingot import**: In Q1, the import profit and loss was close to the import window of crude lead, and some crude lead flowed in. It is possible that crude lead will continue to flow in Q2 [67]. 8. Second - Quarter Fundamental and Trading Logic Outlook - **Primary lead**: In Q2, primary lead smelters will continue to produce. Pay attention to the overseas mine repair progress and the limitations of raw materials and costs on smelting capacity. - **Secondary lead**: The shortage of waste batteries will continue. Secondary lead smelters may cut production after demand weakens. - **Demand**: Policy - driven replacement demand and high - speed growth in the energy storage sector will offset some of the weakening automotive demand and high - ratio - suppressed export demand. Demand may run stably in Q2. - **Trading logic**: Lead prices may shift to wide - range oscillations in Q2. It is advisable to adopt a low - buying strategy in the medium - term, and pay attention to inter - period positive spreads and internal - external reverse spreads [69].