en.Wedoany.com Reported - The US and Japanese central banks have recently simultaneously released strong signals of interest rate hikes, primarily due to the repeated surge in energy inflation caused by geopolitical conflicts in the Middle East. US non-farm payrolls in May exceeded expectations, growing by 172,000, significantly higher than the previous month's 115,000 and the market expectation of 85,000. In Japan, the sharp depreciation of the yen and imported inflationary pressures have prompted officials to frequently make hawkish statements, leading the market to reverse its previous dovish stance and price in rate hikes. Bank of Japan Governor Kazuo Ueda stated at a press conference that the upside risks to the economy in the current fiscal year outweigh the downside risks, with companies showing an increased willingness to raise prices, posing a risk of a significant upward revision in price expectations.
Market concerns about rate hikes are focused on tightening liquidity and rising real interest rates, putting pressure on precious and non-ferrous metal markets. Shanghai lead prices have broken through a two-year consolidation range, shifting the trading center downward.
In the sodium battery sector, the industrialization process is accelerating. Leading companies have achieved mass production, capacity expansion, large orders, and breakthroughs in vehicle applications across multiple fronts, with the industry on the verge of large-scale commercial use. Major players such as CATL, BYD, and Gotion High-tech have confirmed plans to begin large-scale production of sodium batteries in the second half of 2026. BYD's 30 GWh sodium battery production line in Xining, Qinghai, started operations in July 2025, with plans to complete capacity ramp-up and achieve full release by July 2026. Currently, China's total installed and under-construction sodium battery capacity has exceeded 320 GWh, with over 80 GWh added in the first half of the year. In April, CATL signed a three-year, 60 GWh sodium battery energy storage order with Hyperstrong. Changan Automobile's first sodium battery passenger vehicle has completed extreme cold weather testing in northern China, verifying its low-temperature performance advantages.
In terms of application scenarios, sodium batteries have achieved substantial substitution for lead-acid batteries in four major areas. In the low-speed and commercial electric vehicle power battery sector, CATL and Zhongke Haina have deployed sodium batteries in two-wheeled electric vehicles, micro commuter cars, and mining area commercial vehicles. In the automotive 12V start-stop battery sector, Pylontech, Chilwee, and Tianneng have launched dedicated sodium battery start-stop products, rapidly penetrating the extreme cold regions of northern China. In the communication base station backup power sector, China Mobile, China Unicom, and China Tower are centrally procuring sodium battery packs to replace lead-acid equipment in high-altitude and low-temperature base stations. In the data center UPS and energy storage sector, CATL and Pylontech have implemented multiple large-scale data center sodium battery backup and energy storage projects.
Despite the clear trend of sodium battery substitution, lead-acid batteries remain irreplaceable at the current stage, and the two will coexist in a long-term misaligned manner. Lead-acid batteries have mature production processes, low costs, and a well-established recycling system, offering the lowest comprehensive usage cost among all battery types. Their recycling rate exceeds 95%, forming a closed-loop circular economy industrial chain, while the sodium battery recycling system is still in its infancy. Additionally, the lead-acid battery industry has developed a complete set of industry standards and equipment adaptation systems, providing strong adaptability in niche scenarios requiring low power and short-term use.
On the smelting side, China's primary lead supply has short-term increments, but the sharp decline in silver prices has made it difficult for by-product revenues from sulfuric acid to cover the gap. Smelting profits have fallen, and lead concentrate processing fees remain low, posing a risk of reduced primary lead supply in the second half of the year. For secondary lead, falling lead prices coupled with high scrap battery prices have widened smelting losses, hindering plant restarts and potentially expanding production cuts, providing cost support for lead prices. In the overseas spot market, environmental inspections on secondary lead in Vietnam have ended, but raw material shortages and slow restart progress mean supply recovery will take time. In terms of cross-market ratios, expectations of reduced secondary lead production in China support relatively strong Shanghai lead prices, while Southeast Asian spot supply is gradually loosening. However, LME lead inventories remain high at 314,000 tons, capping the upside for London lead prices.
Overall, the lead market faces bearish macro and positioning factors, with a slight surplus in fundamentals but tightening margins. Both capital and industrial logic are suppressing lead prices while simultaneously brewing opportunities for bottom recovery. The current decline in Shanghai lead prices is primarily driven by two main themes: expectations of Fed rate hikes and sodium battery substitution. As lead and silver prices decline together, primary lead producers, facing shrinking silver by-product revenues, may actively reduce output in the second half of the year; secondary lead producers are experiencing worsening losses, with both factors providing marginal support for lead prices.
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