In the 2023 East China lead ingot market, the average price at the beginning of the year was 15745 yuan/ton, and the average price at the end of the year was 15695 yuan/ton, a decrease of 0.32% annually. The lowest point of the year appeared on June 2nd at 14950 yuan/ton, and the highest point of the year appeared on September 20th at 16915 yuan/ton, with a maximum amplitude of 13.14%. The overall trend can be divided into two stages: in the first half of the year, it fluctuated weakly, and in the second half, it first rose and then fell.
The lead price trend chart from 2020 to 2022 shows that the price trend of lead ingots has not fluctuated much in the past three years, and the overall trend has maintained a wide range of fluctuations. The distinction between peak and off peak seasons is not so obvious, and most of them follow the overall market fluctuations. The main reason for this trend is that lead is a recyclable metal, and recycled lead in China has developed rapidly in the past two years, with annual production increasing from 2.2 million tons in 2018 to 3.66 million tons in 2021. Therefore, the overall supply of lead ingots in China is relatively sufficient, and the price fluctuation range is limited.
K-bar chart of commodity prices, using the concept of price trend K-line, reflects the weekly or monthly price fluctuations in the form of a bar chart. Investors can buy and sell based on the changes in the K-bar chart. Red indicates an increase; Green indicates a decline; The height of the K-bar represents the range of fluctuations. In 2023, there were 6 months of decline and 6 months of increase, with the largest decline occurring in January, a decrease of 3.84%; The largest increase occurred in July, with a rise of 3.78%. Overall, the monthly fluctuations throughout the year are all within 4%, with relatively small market fluctuations and maintaining a broad range of fluctuations.
Looking back on 2023
In the first half of 2023, lead prices remained weak and volatile, and lead supply continued to increase. However, during the same period, downstream demand did not relax, and under the influence of loose supply, lead ingots operated weakly. In January, the metal market was generally under pressure, with Shanghai lead falling for 11 consecutive days, domestic inventories rising significantly, and lead prices falling under pressure. The market was weak and volatile from February to June, with an operating range of 14950-15300 yuan/ton.
In the second half of the year, lead prices have been rising for three consecutive months, with a cumulative increase of 7.55%. On September 20th, they reached a nearly four-year high of 16915 yuan/ton. In the second half of the year, the supply of primary lead is tight, while the demand for recycled lead is in short supply due to the shortage of raw materials and waste batteries, and the price has risen to a high level within 5 years. The continuous increase in the cost of recycled lead has driven the lead ingot market upwards. After entering the traditional peak season, the growth in exports once again boosted the sentiment of the lead ingot market. In the later stage, with the continuous release of recycled lead production capacity and the end of the traditional peak season, lead prices have fallen significantly.
Looking ahead to 2024:
Supply: Lead supply maintains incremental growth
China surpassed the United States to become the world’s largest producer of refined lead in 2003 and has remained at the top. The production of domestic lead ingots is mainly divided into primary lead and recycled lead. Based on current statistical data, the production of primary lead and recycled lead is on the rise in 2023. However, in 2024, both primary lead and recycled lead will have new production capacity. Therefore, we expect that the supply of domestic lead ingots will remain loose in 2024.
Requirement: Essential needs still exist
The downstream applications of lead mainly include lead-acid batteries, lead oxide, lead alloys, lead salts, and cables. Among them, lead-acid batteries are the main field of lead consumption, accounting for more than 80%. China is a major producer, consumer, and exporter of lead-acid batteries, so paying attention to data such as the production of lead-acid batteries can provide a good understanding of downstream demand for lead. The production of lead-acid batteries in China has been increasing year by year from 2015 to 2021. It reached its lowest point in 2018 and has since continued to rise, with a relatively fast growth rate. Production slightly declined in 2022 and continued to rise in 2023. From the data of battery production, it can be seen that downstream markets still have good demand support for the domestic lead ingot market.
The overall operating rate of the battery industry is low in 2023, but due to the large number of new devices put into operation this year, the overall production of batteries is still on the rise. Since 2020, China’s battery export volume has been increasing year by year, with statistical data showing a cumulative export volume of 222 million units from January to November 2023, a year-on-year increase of 13.14%. According to the sub item data, the proportion of battery exports is on the rise, and the improvement in automobile sales in Europe, America, and India continues to be beneficial for future battery exports. In terms of domestic demand, the main focus is still on two wheeled electric vehicles, which have shown relatively stable performance. Overall, the performance of terminal demand in the lead ingot market is still good, and there is still support for essential needs.
Future outlook: From a purely supply and demand perspective, the lead ingot market has not shown any significant positive or negative trends, and overall performance is relatively stable. But at the end of 2023, as the price of waste batteries continued to rise, it drove up the primary lead market. Currently, the price of waste batteries is still at a high level, and the cost support for the lead ingot market is still strong. Lead is a commodity that performs significantly during the off peak season. Generally, June to October is a seasonal peak season, and an increase in demand will drive up lead prices. Overall, in 2024, lead prices will maintain a range of fluctuations, with some upward potential in peak season prices.
Related data:
In November 2023, China’s automobile production and sales reached 3.093 million and 2.97 million respectively, with year-on-year growth of 29.4% and 27.4%. Among them, the production and sales of new energy vehicles reached 1.074 million and 1.026 million respectively, with year-on-year growth of 39.2% and 30%.
On December 18th, the National Bureau of Statistics released data showing that the national lead production in November 2023 was 653000 tons, a year-on-year decrease of 3%.
According to data from the International Lead and Zinc Research Group (ILZSG) on December 21, the global lead market supply gap narrowed to 13800 tons in October 2023 and 16100 tons in September; From January to October 2023, there was an oversupply of 40000 tons in the global lead market, and from January to October 2023, there was a shortage of 213000 tons in the global lead market.
According to data from the General Administration of Customs, the import volume of refined lead (including unrefined refined lead) in China in November 2023 was 20.75 tons, a decrease of 64.6% month on month and 51.5% year-on-year.
The latest report released by the World Bureau of Metals Statistics (WBMS) shows that from January to October 2023, global refined lead production was 12.2557 million tons, consumption was 12.2826 million tons, and supply was in short supply of 26900 tons. From January to October 2023, the global lead ore production was 4.1682 million tons. In October 2023, the global refined lead production was 1.2428 million tons, with a consumption of 1.2561 million tons and a supply shortage of 13300 tons. In October 2023, the global lead ore production was 434700 tons.
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