SHFE lead futures declined 0.69% to ¥16,580/mt on June 26, closely tracking LME price movements. The Shanghai contract has lost 1.04% over the past seven days but remains within its established ¥16,000-17,000/mt trading range.
Chinese lead-acid battery production fell 2.3% month-on-month in May, consistent with the summer demand slowdown. However, the year-on-year comparison shows production up 1.5%, indicating that underlying demand growth remains modestly positive despite seasonal headwinds.
China’s e-bike sector continues to support lead demand. With an estimated 350 million e-bikes on Chinese roads, the replacement battery cycle generates steady demand even during summer months. New e-bike sales were up 8% year-on-year through May, according to China Bicycle Association data.
Chinese secondary lead production, which accounts for roughly 55% of domestic output, faced tighter scrap battery availability in Q2. Scrap battery prices on a per-amp-hour basis rose 5% since April, compressing secondary smelter margins. This has pushed more demand toward primary lead, tightening the overall market.
China’s refined lead exports rose 22% year-on-year in May, as domestic producers sought higher LME-linked prices. However, the export arbitrage has narrowed in June as LME lead declined faster than SHFE, and this export window may close in Q3 if LME remains below $1,900.
Chinese lead prices are stable but face headwinds from both seasonal demand and scrap costs. For buyers with Chinese manufacturing operations, SHFE pricing offers modest savings versus LME-linked imports. Watch the export window — if Chinese exports decline in Q3, domestic supply could loosen and SHFE could trade at a discount to LME, improving procurement economics for domestic buyers.