The lead scrap market is tighter than it has been in over a decade. US battery collection rates, while still high, have fallen to roughly 92% from 95% in 2019. A 3-percentage-point decline may seem small, but in a market where secondary smelters produce 7.5 million tonnes of refined lead annually, it translates to a shortfall of roughly 225,000 tonnes of scrap lead per year. Scrap lead prices are trading at a $50-80 per tonne premium over LME lead — an inversion that signals acute feedstock scarcity.
The causes of scrap tightness are structural, not cyclical. The shift toward larger, heavier AGM and EFB batteries (used in start-stop vehicles) means batteries last longer before reaching end-of-life. Improved battery management systems in modern vehicles extend battery life further. And export restrictions on scrap in several Asian countries have reduced the flow of used batteries to unregulated recyclers, which paradoxically tightens scrap supply for regulated smelters as collection networks adjust.
European secondary smelters are facing additional headwinds. Scrap availability in Europe was down an estimated 5% year-over-year through May, partly due to competition from Asian buyers willing to pay higher prices for European scrap. Several European secondary smelters have reduced operating rates to 75-80% due to feedstock constraints.
The scrap tightness is the binding constraint on lead supply growth. Global secondary lead output grew just 0.5% year-over-year through May, compared to 1.8% growth in primary (mine-based) production. Since secondary smelting accounts for 60% of global refined lead output, the scrap constraint means total refined lead supply is barely growing despite strong demand. The ILZSG estimates the refined lead market was in a modest deficit through May.
The scrap tightness in lead is a structural feature that won’t resolve quickly. Battery collection rates take years to improve, and longer battery life means less scrap entering the system per vehicle. For buyers, the implication is that lead supply growth will remain constrained, putting a floor under prices even in a demand downturn. At $1,894/mt, lead is below its 2026 average and represents good value given the supply constraints. If scrap tightness persists through Q3 — as seasonal demand rises — expect lead to test $2,000-2,050.