1. Report Industry Investment Rating - Absolute price: Neutral - Option strategy: Sell wide straddle [3] 2. Core Viewpoints of the Report - The global lead concentrate market continues to be in a tight balance. Domestic TC remains low, and the negative processing fee range for imported ores is expanding. Mines are reluctant to sell, leading to passive production cuts at smelters. The domestic primary lead production rate is only 60%, and smelters in Hunan, Yunnan and other places are undergoing maintenance until January. Secondary lead production is limited due to the scarcity of waste battery supplies and limited profit recovery. Overall, the supply elasticity is insufficient. Although the demand is in the off - season for lead - acid batteries, the social inventory has continuously declined to a two - year low, and the spot premium is firm, providing support for prices. It is expected that the current lead price will maintain a volatile pattern. [3] 3. Summary by Relevant Catalogs Market News and Important Data Spot - On December 11, 2025, the LME lead spot premium was -$49.03/ton. The SMM1 lead ingot spot price changed by 100 yuan/ton to 17,075 yuan/ton compared with the previous trading day. The SMM Shanghai lead spot premium changed by 25 yuan/ton to 25.00 yuan/ton. The SMM Guangdong lead spot price changed by 100 yuan/ton to 17,125 yuan/ton. The SMM Henan lead spot price changed by 100 yuan/ton to 17,100 yuan/ton. The SMM Tianjin lead spot premium changed by 100 yuan/ton to 17,100 yuan/ton. The lead concentrate - scrap price difference remained unchanged at -25 yuan/ton. The price of scrap electric vehicle batteries changed by 25 yuan/ton to 9,925 yuan/ton. The price of scrap white shells remained unchanged at 10,075 yuan/ton. The price of scrap black shells changed by 25 yuan/ton to 10,275 yuan/ton. [1] Futures - On December 11, 2025, the main SHFE lead contract opened at 17,155 yuan/ton and closed at 17,155 yuan/ton, a change of 40 yuan/ton from the previous trading day. The trading volume for the whole trading day was 34,885 lots, a change of -1,564 lots from the previous trading day, and the position was 35,754 lots, a change of -3,561 lots from the previous trading day. The intraday price fluctuated, with a maximum of 17,220 yuan/ton and a minimum of 17,070 yuan/ton. In the night session, the main SHFE lead contract opened at 17,115 yuan/ton and closed at 17,120 yuan/ton, a 0.20% decrease from the afternoon close. According to SMM, the SMM1 lead price dropped by 125 yuan/ton from the previous trading day. In Henan, holders' quotes were at a discount of 90 - 50 yuan/ton to the SHFE lead 2601 contract, and the discount narrowed further. In Hunan, the quoted price of lead smelters for the delivery brand was at a premium of 0 - 25 yuan/ton to SMM1 lead. After some smelters sold out their inventory, the trading volume declined. As the lead price weakened, some downstream enterprises made purchases at low prices, but smelters generally delivered goods through long - term contracts, and the trading volume of spot contracts was relatively light. [2] Inventory - On December 11, 2025, the total SMM lead ingot inventory was 21,000 tons, unchanged from the previous week. As of December 11, the LME lead inventory was 235,475 tons, a decrease of 75 tons from the previous trading day. [2]

1. Report Industry Investment Rating There is no information provided regarding the report industry investment rating in the given content. 2. Core Viewpoints of the Report - As the delivery of the SHFE Lead 2511 contract ended, some supplies returned to the spot market. With general downstream consumption and production based on sales, short - term lead prices are expected to face downward pressure. Considering the continuous shortage of raw materials, it may limit the subsequent start - up of smelters. Attention should be paid to the support level around 17,000 yuan/ton. In the future, continuous attention should be paid to the impact of raw material arrivals on smelter start - up [3]. 3. Summary According to the Directory 3.1 Market Review - SMM1 lead ingot average price increased by 1.01% month - on - month to 17,425 yuan/ton; SHFE lead main contract closing price rose by 0.43% to 17,495 yuan/ton; LME lead closing price (electronic trading) increased by 1.03% to 2,066 US dollars/ton [14]. 3.2 Basis There is no specific analysis or conclusion about the basis in the content other than presenting some basis - related data charts. 3.3 Raw Material Situation - Domestic lead concentrate processing fees remained flat month - on - month at 350 yuan/metal ton, and imported lead concentrate processing fees remained flat at - 135 US dollars/dry ton. The expectation of tight ore supply remains unchanged, and with precious metal prices fluctuating at high levels, TC quotes are stable but tend to weaken. Smelter profits are acceptable, and as of November 7, smelter profits (excluding by - product revenues such as zinc and copper) were 163.6 yuan/ton [32]. - As of November 14, the average price of scrap batteries was 10,025 yuan/ton, remaining flat month - on - month. The automotive battery has entered the peak scrapping season, and most large smelters reported sufficient battery arrivals, and the price did not rise with the lead price [46]. 3.4 Primary Lead - The primary lead start - up rate remained flat month - on - month at 67.57%. The production of major deliverable primary lead brands in China had small fluctuations, with some smelters reducing production due to raw material shortages [33]. - The weekly production and maintenance arrangements of deliverable primary lead smelting enterprises showed that the total weekly production in the week of November 7 was 50,050 tons, 49,850 tons in the week of November 14, and an expected 50,150 tons this week. Some enterprises in Anhui were under maintenance, while those in Inner Mongolia resumed normal production [38]. 3.5 Recycled Lead - As of November 14, the comprehensive profit of large - scale recycled lead enterprises was 361 yuan/ton, and that of small - and medium - scale recycled lead enterprises was 146 yuan/ton. With lead prices consolidating at high levels and scrap battery prices remaining stable, the profits of recycled lead smelters improved significantly [52]. - As of November 13, the raw material inventory of recycled lead increased to 152,750 tons, and the finished product inventory decreased to 4,400 tons. Due to limited primary lead supplies and firm quotes, some downstream buyers turned to recycled lead, resulting in a reduction in recycled lead finished product inventory [55]. - The recycled lead enterprise start - up rate decreased by 2.5 percentage points to 48.2%. As of last Friday, the weekly production of recycled lead was 59,400 tons, showing a decline. The start - up in Henan decreased significantly due to environmental protection control, while that in Anhui increased as smelters resumed production. Some smelters said they might stop production for maintenance around late November if the raw material inventory continued to decline [58]. 3.6 Lead Battery - The lead battery start - up rate increased by 1.34 percentage points to 70.56%. The resumption of production of enterprises that previously reduced production due to equipment maintenance or high lead prices drove the continuous increase in start - up. However, in the terminal market, the peak season of the automotive battery market was not prosperous, and dealers purchased according to demand. Some medium - and large - sized enterprises had weak new orders and actively reduced production to destock, so the overall battery start - up had not returned to the level in October [66]. 3.7 Import and Export - As of November 7, the export of refined lead suffered a loss of about 2,700 yuan/ton. As of November 17, the import profit was - 406.85 yuan/ton, and the import profit window was closed [77]. 3.8 Inventory - As of November 17, the total social inventory of lead ingots in five locations was 38,600 tons, showing an increase; the factory inventory of major deliverable primary lead brands was 3,700 tons, showing a month - on - month decline. Due to delivery and position transfer, the factory inventory of lead ingots decreased, and the social inventory increased. With smelters resuming production and the end of the 2511 contract delivery, the decline in factory inventory is expected to slow down [88]. - As of November 14, the SHFE refined lead inventory was 42,800 tons, showing a month - on - month increase; as of November 13, the LME inventory was 222,500 tons, also showing an increase [91]. - The monthly supply - demand balance sheet showed the production, export, import, consumption, and inventory data of primary lead and recycled lead from July 2024 to August 2025 [92].

Report Investment Rating - The investment rating for the lead industry is neutral [4] Core Viewpoint - At present, the processing fee for lead concentrates remains low despite the rising by - product prices, and there are no significant fundamental contradictions. Downstream enterprises are expected to fully recover from the holiday next week, mainly adopting a production - based - on - sales model. The lead price is expected to fluctuate in the range of 16,920 yuan/ton to 17,300 yuan/ton [4] Summary by Directory Lead Market Analysis - **Mine End**: In the week of October 10, the quotation divergence in the imported ore market continued. With the silver price hitting new highs, the processing fee for silver - containing lead concentrates continued to decline. Domestically, some mines completed fourth - quarter pre - sales and suspended quotations, leading to a shortage of market - circulating resources. There were north - south differences in smelter processing fees. The winter - storage order processing fee in Henan and Inner Mongolia was 300 - 500 yuan/metal ton, while in Yunnan and Hunan, due to the decline in raw material inventory, some smelters could only purchase low - silver ore sources at 0 - 200 yuan/metal ton. In the long - term, the supply - demand imbalance of lead concentrates is difficult to improve [1] - **Primary Lead**: In the week of October 10, the operating rate of primary lead smelters in three provinces was stable at 68.47%, a slight increase of 1.98% compared to before the holiday. A smelter in Henan resumed production as planned, increasing output slightly, while a company in Hunan was expected to see a decline in electrolytic lead output in October due to crude lead maintenance. Overall, the operating situation showed regional differentiation [1] - **Recycled Lead**: In the week of October 10, the operating rate of recycled lead in four provinces rose to 34.04%, an increase of 5.63 percentage points. Anhui was the main driving force, with a large smelter resuming production and another entering the baking stage. The operating rate in Anhui is expected to rise by about 10 percentage points next week. The operating rates in other provinces were generally stable. It is expected that the enthusiasm of recycled lead enterprises to start work will only increase limitedly [2] - **Consumption**: In the week of October 10, the comprehensive operating rate of lead - acid battery enterprises in five provinces was 61.71%, an increase of 6.58 percentage points. The resumption of work after the holiday was the main reason for the increase. It is expected that the operating rate will continue to recover next week, and the production rhythm will be more inclined to production - based - on - sales [2] - **Inventory**: In the week of October 10, the total social inventory of lead ingots in five regions was 3.69 million tons, a decrease of 2.05 million tons compared to the previous week. The LME inventory decreased by 450 tons to 237,000 tons [3]

Report Industry Investment Rating - The investment rating for the lead industry is cautiously bullish [3] Core View of the Report - Despite the approaching National Day holiday and weak procurement from downstream battery companies, the lead ore supply remains tight. Coupled with the overall positive impact of the Fed's interest - rate cut cycle on non - ferrous metals, it is recommended to adopt a strategy of buying on dips for hedging with a buying range between 16,950 yuan/ton and 17,000 yuan/ton [3] Summary by Related Catalogs Lead Market Analysis - **Mine end**: In the week of September 27, the domestic lead concentrate market continued to face a supply shortage. The import ore market was seller - dominated with light actual transactions. The processing fee (TC) of imported ore pb60 showed a downward trend. Smelters in Hunan, Inner Mongolia, and Henan reported downward pressure on lead concentrate processing fees. Due to insufficient imported ore arrivals and a tight supply of recycled lead raw materials, the demand gap for lead concentrates widened. Some smelters lowered the pb50TC quote to boost procurement [1] - **Primary lead**: In the week of September 27, the average operating rate of primary lead smelting enterprises was 66.49%, a slight increase of 0.5 percentage points from the previous week. Production in Henan fluctuated, with one enterprise resuming production and another still under maintenance. Small factories in Hunan reduced production slightly due to raw material quality issues, while production in Yunnan was stable. A factory in North China increased production after maintenance, and enterprises in East China have a planned maintenance in the fourth quarter but the specific time is undetermined [1] - **Recycled lead**: In the week of September 28, the operating rate of recycled lead in four provinces rebounded to 27.47%, a rise of 3.73 percentage points from the previous week. This was mainly due to the pre - holiday stocking demand from downstream battery companies, which pushed up the lead price. The stable price of waste batteries helped smelters repair their profits from losses to profits. The operating rate in Anhui increased significantly by 8.25 percentage points. It is expected that the resumption of production will accelerate after the holiday, and the operating rate may continue to rise [2] - **Consumption**: In the week of September 28, the comprehensive operating rate of lead - acid battery enterprises was 71.62%, a slight increase of 0.56 percentage points from the previous week. The demand for electric bicycle batteries improved due to stable supporting orders and pre - holiday restocking by dealers, which drove some enterprises to increase production. However, orders for automotive batteries were weak, and some enterprises planned to take a 5 - 8 - day holiday for the National Day, resulting in low production enthusiasm. With the approaching double festivals, enterprises generally arranged holidays, and the operating rate is expected to decline [2] - **Inventory**: As of the week of September 28, the total social inventory of SMM lead ingots in five regions reached 4.64 million tons, a decrease of 2.05 million tons from the previous week. The LME inventory decreased by 125 tons to 219,425 tons from the previous week [2] Strategy - It is recommended to adopt a strategy of buying on dips for hedging with a buying range between 16,950 yuan/ton and 17,000 yuan/ton [3]