Thin profit margins drove many secondary lead smelters across China to cut or suspend production late week, we learned as of Monday July 30. Secondary refined lead supplies in Guizhou province has halved from some 800 mt per day at the end of June.
Profit margins began to narrow in July as production at secondary lead smelters recovered from the end of month-long environmental reviews, and as lead prices weakened. As of mid-July, margins stood at 300-400 yuan/mt, down by half from the end of June.
Separately, prices of battery scrap faced less volatility than prices of secondary refined due to limited supplies of battery scrap in the market,. The recovery of secondary lead production also grew demand for battery scrap. Our research found that current margis of battery scrap stood at 100-200 yuan/mt.