LME Lead at $1,935 as Stocks Climb Above 300,000t

Lead prices on the LME remained subdued near $1,935/t as inventories in LME-registered warehouses climbed above 300,000t for the first time since late 2023. Stocks stand at 301,950t, up 1.2% week-on-week and 22% above the 2025 year-end level. The steady accumulation reflects consistent refined lead supply from China and moderate global demand growth.

Chinese refined lead production ran at 620,000t in May, up 3.5% year-on-year, according to the China Nonferrous Metals Industry Association. Secondary lead production from recycled batteries accounted for 58% of the total, consistent with the long-term trend as primary lead mining declines. Chinese lead exports in the first five months of 2026 reached 85,000t, up 12% year-on-year, pressuring export markets in Southeast Asia and the Mediterranean.

Global lead demand is growing at a modest 1.8% annually, driven primarily by lead-acid battery demand for internal combustion engine starter-lighting-ignition (SLI) applications. The global vehicle parc (ICE vehicles on the road) continues to support replacement battery demand, even as EV adoption grows. Industrial battery demand for telecommunications and UPS backup power grew 4.2% in Q1 2026.

The bear case is that lead faces long-term demand erosion from EV adoption, which eliminates the primary SLI battery application. However, the timeline is gradual: the global ICE vehicle parc is projected to peak around 2030. In the near term, replacement battery demand provides a floor. The bull case centers on potential supply disruptions at secondary lead smelters in Europe and the US from tighter environmental regulations.

Base case for H2 2026: LME lead averages $1,850-2,000/t, with the stock burden preventing any sustained rally above $2,100/t.