Lead Prices Remain in the Doldrums Despite Seasonal Expectations

Why Are Lead Prices Struggling in 2025?

Lead prices continue to face downward pressure in mid-2025, with both international and Chinese markets showing signs of weakness. The metal has recorded five consecutive days of losses on the London Metal Exchange (LME), while Shanghai Futures Exchange (SHFE) contracts remain rangebound with limited upside potential.

This persistent weakness stems from multiple factors affecting both supply and demand dynamics, creating what analysts are calling a “perfect storm” for lead market bearishness.

Current Price Performance Indicators

LME lead prices have dropped to $1,978/mt as of July 16, down $23/mt (1.15%) from the previous session, marking the fifth consecutive day of losses. This downward trend indicates significant selling pressure and reduced confidence among market participants.

SHFE lead contracts closed at 16,885 yuan/mt, down marginally by 0.06%, demonstrating the lackluster momentum in Chinese markets despite expectations of seasonal demand strength.

Market data shows bulls continuing to reduce positions and exit the market, with trading activity focused primarily on short-term opportunities rather than long-term positions. The price movement center has notably shifted further downward, indicating a potential continuation of the bearish trend.

“The anticipated peak season consumption that typically drives mid-year lead prices has failed to materialize, leaving the market in the doldrums with limited recovery catalysts on the horizon.” — Shanghai Metal Market (SMM) Analysis, July 17, 2025

Key Market Signals

Social inventory of lead ingots increased by 5,600 mt to 63,400 mt between July 7-14, 2025, across five major Chinese markets. This inventory build-up during what should be a period of strong seasonal consumption raises significant concerns about underlying demand weakness.

Interestingly, LME inventory decreased by 1,850 mt to 269,225 mt as of July 16, 2025, primarily due to destocking in Singapore that offset accumulation in Kaohsiung. This divergence between Chinese and international inventory trends points to regional market disconnects.

Scrap battery and lead concentrate prices have fallen in tandem with refined lead, creating a challenging environment across the entire supply chain. This price alignment has weakened cost support for producers, though some secondary smelters have begun resisting further price declines.

How Is the Supply-Demand Balance Affecting Lead Markets?

The current lead market is experiencing a significant mismatch between anticipated seasonal demand and actual consumption patterns. This imbalance is creating substantial pressure on prices and influencing trading behavior across the supply chain.

Supply-Side Dynamics

Absolute prices of scrap batteries and lead concentrates have decreased in recent weeks, following the downward trend in refined lead markets. This price alignment has slightly weakened the cost support below lead prices, though not drastically enough to trigger widespread production cuts.

Some smelters are actively refusing to lower prices further, with secondary lead smelters showing increasing reluctance to sell at current price levels. This resistance could eventually provide a floor for prices if maintained across a significant portion of the market.

Regional supply differences between northern and southern China are widening noticeably. Northern Chinese smelters have begun quoting premiums against SMM #1 lead average prices, while southern smelters are expanding their discount offerings—creating an unusual geographic price disparity.

Secondary lead production factors:

Recycling economics remain challenging but viable

Transportation costs affecting regional price differences

Some smelters opting for pre-sales strategies

Others halting quotes altogether in resistance to price pressures