Report Industry Investment Rating No relevant content provided. Core Viewpoint The primary lead production rate declined slightly, while the secondary lead production rate increased from a low level, maintaining a relatively loose supply of lead ingots. The price of lead-acid batteries stopped falling and stabilized, and with the approaching peak season, the purchasing of downstream battery manufacturers improved slightly. However, according to SMM information, the Middle East will impose anti-dumping duties ranging from 25% to 70% on some Chinese or Chinese-invested lead-acid battery enterprises, which will suppress the consumption expectation of lead ingots to some extent. Overall, the supply and demand of lead ingots are slightly in surplus, and there are deliveries in both domestic and overseas inventories. It is expected that the domestic lead price will run weakly [11]. Summary by Directory 01. Weekly Assessment - Price Review: The Shanghai Lead Index closed up 0.36% at 16,958 yuan/ton on Friday, with a total unilateral trading position of 106,900 lots. As of 15:00 on Friday afternoon, LME Lead 3S fell 2.5 to $2,030.5/ton compared with the same period of the previous day, with a total position of 140,700 lots. The average price of SMM 1 lead ingots was 16,750 yuan/ton, and the average price of secondary refined lead was 16,750 yuan/ton, with a flat price difference between refined and scrap lead. The average price of waste electric vehicle batteries was 10,250 yuan/ton [11]. - Domestic Structure: According to Steelhome data, the domestic social inventory slightly decreased to 65,800 tons. The futures inventory of lead ingots on the Shanghai Futures Exchange was recorded at 60,000 tons, with an internal primary basis of -135 yuan/ton and a spread of -30 yuan/ton between consecutive contracts and the first consecutive contract. Overseas Structure: The LME lead ingot inventory was recorded at 269,300 tons, and the LME lead ingot cancelled warrants were recorded at 70,800 tons. The external cash - 3S contract basis was -$24.27/ton, and the 3 - 15 spread was -$58.2/ton. Cross - Market Structure: After excluding exchange rates, the on - screen Shanghai - London ratio was recorded at 1.17, and the import profit and loss of lead ingots was -834.57 yuan/ton [11]. - Industry Data: At the primary end, the port inventory of lead concentrates was 14,000 tons, and the factory inventory was 439,000 tons, equivalent to 26.4 days. The imported TC of lead concentrates was -$60/dry ton, and the domestic TC was 500 yuan/metal ton. The primary production rate was recorded at 63.37%, and the primary ingot factory inventory was 6,000 tons. At the secondary end, the scrap lead inventory was 89,000 tons, the weekly production of secondary lead ingots was 32,000 tons, and the secondary ingot factory inventory was 10,000 tons. At the demand end, the operating rate of lead - acid batteries was 71.86% [11]. 02. Primary Supply - Import and Production Data: In June 2025, the net import of lead concentrates was 118,000 physical tons, a year - on - year change of 31.7% and a month - on - month change of 13.6%. From January to June, the cumulative net import of lead concentrates was 669,400 physical tons, a cumulative year - on - year change of 37.6%. In June 2025, the net import of silver concentrates was 126,000 physical tons, a year - on - year change of -1.2% and a month - on - month change of -7.5%. From January to June, the cumulative net import of silver concentrates was 847,500 physical tons, a cumulative year - on - year change of 2.6%. In June 2025, China's lead concentrate production was 153,100 metal tons, a year - on - year change of 14.9% and a month - on - month change of 2.5%. From January to June, the total production of lead concentrates was 787,000 metal tons, a cumulative year - on - year change of 13.1%. In June 2025, the net import of lead - containing ores was 121,200 metal tons, a year - on - year change of 15.7% and a month - on - month change of 3.8%. From January to June, the cumulative net import of lead - containing ores was 740,700 metal tons, a cumulative year - on - year change of 19.0% [15][17]. - Total Supply: In June 2025, the total supply of Chinese lead concentrates was 274,300 metal tons, a year - on - year change of 15.3% and a month - on - month change of 3.1%. From January to June, the cumulative supply of lead concentrates was 1,527,700 metal tons, a cumulative year - on - year change of 15.9%. In April 2025, the global lead ore production was 380,100 tons, a year - on - year change of 5.3% and a month - on - month change of 0.0%. From January to April, the total production of lead ore was 1,483,500 tons, a cumulative year - on - year change of 7.2% [19]. - Inventory and Processing Fees: At the primary end, the port inventory of lead concentrates was 14,000 tons, and the factory inventory was 439,000 tons, equivalent to 26.4 days. The imported TC of lead concentrates was -$60/dry ton, and the domestic TC was 500 yuan/metal ton [21][23]. - Smelting Data: The primary production rate was recorded at 63.37%, and the primary ingot factory inventory was 6,000 tons. In June 2025, China's primary lead production was 328,600 tons, a year - on - year change of 16.2% and a month - on - month change of -0.8%. From January to June, the total production of primary lead ingots was 1,884,700 tons, a cumulative year - on - year change of 9.2% [26]. 03. Secondary Supply - Raw Material and Production: At the secondary end, the scrap lead inventory was 89,000 tons. The weekly production of secondary lead ingots was 32,000 tons, and the secondary ingot factory inventory was 10,000 tons. In June 2025, China's secondary lead production was 286,600 tons, a year - on - year change of -13.6% and a month - on - month change of 2.4%. From January to June, the total production of secondary lead ingots was 1,933,700 tons, a cumulative year - on - year change of -0.1% [31][33]. - Import and Total Supply: In June 2025, the net export of lead ingots was -7,200 tons, a year - on - year change of 43.5% and a month - on - month change of -22.1%. From January to June, the cumulative net export of lead ingots was -43,900 tons, a cumulative year - on - year change of 448.2%. In June 2025, the total domestic supply of lead ingots was 622,400 tons, a year - on - year change of 0.5% and a month - on - month change of 0.3%. From January to June, the cumulative domestic supply of lead ingots was 3,862,300 tons, a cumulative year - on - year change of 5.3% [35]. 04. Demand Analysis - Battery Demand: At the demand end, the operating rate of lead - acid batteries was 71.86%. In June 2025, the apparent domestic demand for lead ingots was 624,900 tons, a year - on - year change of 0.0% and a month - on - month change of 4.5%. From January to June, the cumulative apparent domestic demand for lead ingots was 3,826,600 tons, a cumulative year - on - year change of 3.5% [38]. - Battery Export: In June 2025, the net export volume of batteries was 1,825,850 units, and the net export weight was 99,200 tons. It is estimated that the net export of lead in batteries was 62,000 tons, a year - on - year change of -16.9% and a month - on - month change of -5.0%. From January to June, the total net export of lead in batteries was 366,300 tons, and the cumulative net export of lead in batteries increased by -3.1% year - on - year [41]. - Inventory Days: In June 2025, the enterprise finished - product inventory days slightly decreased to 26 days, and the distributor inventory days slightly increased to 39.88 days [44]. - 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 starting batteries with lithium - iron phosphate starting batteries, the current high vehicle ownership and high replacement demand for existing vehicles support the relatively high operating rate of starting batteries and domestic lead ingot consumption. In the base station sector, the rapid development of communication technology and the increasing number of communication base stations and 5G base stations across the country drive the steady increase in the demand for lead - acid batteries [48][50][53]. 05. Supply - Demand Inventory - Domestic Balance: In June 2025, the domestic supply - demand gap of lead ingots was a shortage of 35,700 tons. From January to June, the cumulative domestic supply - demand gap of lead ingots was a surplus of 0 tons [62]. - Global Balance: In April 2025, the global refined lead supply - demand gap was a surplus of 6,900 tons. From January to April, the cumulative global refined lead supply - demand gap was a surplus of 3,700 tons [65]. 06. Price Outlook - Domestic Structure: According to Steelhome data, the domestic social inventory slightly decreased to 65,800 tons. The futures inventory of lead ingots on the Shanghai Futures Exchange was recorded at 60,000 tons, the internal primary basis was -135 yuan/ton, and the spread between consecutive contracts and the first consecutive contract was -30 yuan/ton [70]. - Overseas Structure: The LME lead ingot inventory was recorded at 269,300 tons, and the LME lead ingot cancelled warrants were recorded at 70,800 tons. The external cash - 3S contract basis was -$24.27/ton, and the 3 - 15 spread was -$58.2/ton [73]. - Cross - Market Structure: After excluding exchange rates, the on - screen Shanghai - London ratio was recorded at 1.17, and the import profit and loss of lead ingots was -834.57 yuan/ton [76]. - Position Analysis: The top 20 net positions of Shanghai Lead turned to net short, the net long positions of LME lead investment funds decreased, and the net short positions of commercial enterprises increased. The position perspective indicates a bearish trend [79].

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].