Recently, overall metal varieties have fallen, and the lead market has been relatively resilient, maintaining range oscillations. Although multiple factors, such as environmental protection and downstream production cuts, are interfering, it is expected that the shrinking supply will still be weaker than the weak demand, and lead prices will continue to fall under pressure in the later period.

　　Weak primary lead support

　　China's lead market supply consists of primary lead and recycled lead, with a ratio of approximately 6: 4. Primary lead is made from lead concentrate, and recycled lead is made from recycled lead-acid batteries. In the past two years, due to the sharp drop in lead prices, mine production has been reduced, investment in fixed assets in mines has declined, and China's output has been reduced due to the tightening of environmental protection. Lead concentrates have continued to tighten. Domestic ore processing fees fell from 1,700 yuan / ton in July to 1,100 yuan / ton in December, a decrease of 50%. Imported ore processing fees have returned to a historical low of $ 10 per ton. Due to tight supply constraints, China ’s primary lead production has declined.

　　This year, the industrial structure of the recycled lead market has been optimized, environmental protection and industry entry barriers have been increased, and illegal production capacity has been converted to legal production capacity. The concentration of the industry is increasing. The increase in the operating rate of large-scale smelters has driven output growth, and the operating rate of recycled lead smelting companies has increased to 70%. —80%, compared with less than 60% in the same period last year. Especially in the fourth quarter of this year, more than 200,000 tons of new lead production projects were launched. Although the output was not completely released, the output of recycled lead showed an increasing trend. Therefore, due to the replenishment of recycled lead, the support of lead prices for lead prices is weakening.

　　Rapid inventory rise

　　Downstream consumption of lead is relatively concentrated, and the demand for lead-acid batteries accounts for more than 80%. In the past two years, the lead-acid battery industry has faced greater policy shocks. Since 2016, a consumption tax of 4% has been levied on lead-acid batteries. Others, such as lithium-ion batteries and solar cells, do not need to be levied. This has formed a significant competitive disadvantage for lead-acid batteries. At the same time, the exit schedule of traditional fuel vehicles has been put on the agenda, and the rapid development of new energy vehicles has become a trend, which poses a challenge to traditional lead-acid batteries. Environmental protection has led to further optimization and upgrading of the lead-acid battery industry, which has led to insufficient new consumption highlights in the lead market.

　　In the first half of this year, lead-acid battery companies lacked motivation to replenish stocks due to overdraft consumption in the early stage, and the company's operations began to decline rapidly, and demand gradually recovered in the second half of the year. Recently, the Shandong Province has given warning of severely polluted weather, and some enterprises have cut down production. Due to the difficult improvement on the demand side, lead stocks and social stocks of the Shanghai Futures Exchange rose rapidly from 16,000 tons at the end of September to 43,000 tons at the beginning of December. According to our survey results, smelter inventory is higher than the average standing inventory level. Therefore, rising inventory will weigh on prices.

　　Limited production impact

　　12月北方地区受采暖季影响空气污染加重，产铅第一大省河南进入全省大气污染防治攻坚的最后冲刺阶段。通过我们调研，企业关停及限产生产线系原本就开工不足的生产线，影响或偏小。此外，再生铅产量第一大省安徽，天然气供应紧张影响太和县部分企业生产，预计产量小幅缩减。整体来看，短期限产难改铅市场过剩。

　　总体上，我们认为，铅价短期向上动能受需求压制或不足，而向下受环保制约或有限，沪铅围绕18000元/吨整数关口振荡的可能性较大。由于前期库存见底价格见顶在逐步验证，后期铅市因再生铅投产预期和消费转淡导致的过剩将更加突出，价格或承压下行。

——摘自中国经济导报