Executive Interviews

Asian Metal: Welcome, Mr. Wei, and thank you for joining our interview. First, could you please give us a brief introduction to your company?

Kun Wei: Guizhou Cenxiang Resource Technology Co., Ltd. is located in the Cenxiang Economic Development Zone, Cengong County, Qiandongnan Prefecture, Guizhou Province. In 2018, we completed and commissioned a recycling project with an annual processing capacity of 200,000 tonnes of spent lead-acid batteries. At present, the company has reached a production scale of 130,000 tonnes per year of lead ingots and can process 200,000 tonnes annually of spent lead-acid batteries and other lead-containing wastes. Our core strengths are mainly reflected in three aspects. First, in the pretreatment stage, spent lead-acid batteries are crushed and separated, with lead paste and grids treated separately. The lead paste undergoes a pre-desulfurization process to produce lead oxide, while the lead grids are processed using low-temperature smelting technology, enabling maximum recovery of valuable metals such as antimony and tin and achieving efficient resource recycling. Second, benefiting from the low-temperature smelting process, our overall energy consumption level is relatively low. Third, we have adopted a self-developed “dual-bath smelting furnace,” which achieves industry-leading standards in both energy consumption control and flue gas emission performance.

Asian Metal: Since April this year, the secondary lead industry has experienced widespread production cuts and shutdowns. In your view, what are the main reasons behind this situation?

Kun Wei: I believe there are three main reasons. First, there is a severe mismatch between capacity and raw material supply. The annual production capacity of the secondary lead industry has reached approximately 13.5 million tonnes, while the theoretical peak supply of spent lead-acid batteries in 2024 was only about 6.5 million tonnes. Raw material availability has become even tighter this year, preliminarily estimated at around 6 million tonnes. The shortage of raw materials has pushed scrap battery prices to persistently high levels, leading to extremely intense competition among enterprises for feedstock. Second, downstream demand remains weak. Overall activity in the lead consumption market is insufficient to provide effective support for lead prices. Third, lead prices have remained depressed, making production difficult to sustain profitably. Although lead prices have rebounded somewhat recently and operating rates at secondary lead producers have improved, the industry continues to be constrained by the above factors.

Asian Metal: Secondary lead producers are currently facing significant cost pressure. In your opinion, how can the industry break through this bottleneck?

Kun Wei: Breaking through requires coordinated efforts on multiple fronts. From a long-term perspective, the industry is facing serious overcapacity, which calls for policy guidance to accelerate the exit of outdated capacity. Second, we hope for policies that can stimulate lead consumption. More importantly, it is critical to improve the efficiency of raw material circulation. At present, spent lead-acid batteries and other lead-containing wastes are listed in China’s National Hazardous Waste Catalogue. Cross-provincial transfers require lengthy approval procedures, typically taking 30 to 45 days, which does not align well with market dynamics and urgently needs improvement. A pressing issue for the industry is that cross-provincial circulation of spent lead-acid batteries and other lead-containing wastes remains highly restricted. Because these materials fall under hazardous waste management, cross-provincial transfers involve complex approval procedures, such as applying for transfer manifests on a batch-by-batch basis, resulting in low efficiency. In addition, there is a certain degree of local protectionism among provinces. Some regions with large secondary lead capacity tend to retain scrap battery resources locally by various means, gradually forming regional barriers that are not conducive to optimal nationwide allocation of raw materials. Spent lead-acid batteries are the primary raw material for secondary lead. Their sources are highly fragmented, with small quantities generated by individual sources—mainly individual consumers—but a large total volume at the societal level, making them a typical form of socially generated waste. I suggest that within the environmental management framework, certain optimizations or exemptions could be considered in the collection and transportation stages of spent lead-acid batteries to promote their regulated and smooth circulation and enhance recycling efficiency. For example, in terms of transfer manifests, secondary lead producers could be allowed to issue manifests in reverse to suppliers of spent lead-acid batteries. This would not only strengthen regulatory oversight of hazardous waste transfers but also provide greater flexibility to suppliers of various scales, reduce upstream feedstock monopolization, and further promote the formation of a unified national market.

Asian Metal: What is the current consumption ratio between primary lead and secondary lead in China, and how do you view the future market structure?

Kun Wei: At present, secondary refined lead accounts for roughly half of total lead output in China, forming an approximately “50–50” split with primary lead derived from mined ore. From a domestic perspective, output volumes of primary lead based on lead ore and secondary refined lead based on recycled resources are broadly comparable. The production scale of secondary refined lead is mainly determined by raw material availability. As for spent lead-acid batteries, annual scrap volumes are expected to remain stable at around 5–6 million tonnes over the next five years, providing a relatively stable feedstock base for secondary lead production. However, even as lead ore resources become increasingly tight, lead is often produced as a by-product of other metals. As long as other metals remain profitable, lead supply from mining operations is unlikely to decline significantly. Moreover, some secondary lead producers have already begun transitioning toward integrated smelting of lead concentrates. As a result, I expect the share of primary lead output may still increase, while the proportion of secondary lead may decline slightly, although its importance in the overall market will remain unchanged.

Asian Metal: What is your assessment of overall market demand next year?

Kun Wei: At present, there is a high degree of consensus within the industry, with sentiment generally bearish. This is not merely a cyclical fluctuation, but a structural shift. Alternative battery technologies such as lithium-ion and sodium-ion batteries are exerting a tangible and increasingly strong impact on the lead-acid battery market. Meanwhile, traditional export markets such as Europe, the United States, and the Middle East Gulf region are facing rising trade barriers, constraining exports. Taken together, industry participants generally believe that over the next three to five years, overall demand for lead-acid batteries may contract by around 30%. That said, domestic demand is not entirely without growth potential. For example, the data center energy storage sector is still developing, but current volumes remain limited. In addition, energy storage batteries have long service lives and replacement cycles, making it uncertain whether this segment can offset the decline in traditional applications.

Asian Metal: Where do you see potential opportunities for the lead industry in 2026?

Kun Wei: Recently, we visited seven or eight downstream companies, and none of them expressed a bullish outlook on lead prices for next year, which is quite rare. The commonly cited expected price range is RMB15,000-16,000/t, with the view that prices may still trend lower in the near term. Therefore, potential opportunities may lie primarily in exports. If domestic prices fall to a level that is internationally competitive, while battery plants invested by Chinese companies in Southeast Asia face raw material shortages, an export window could emerge. We are closely monitoring this possibility.

Asian Metal: Given the current environment, is your company considering new development directions?

Kun Wei: This is indeed one of our key areas of focus. As a company centered on secondary lead, we will continue to build on our existing foundation, further optimize our secondary lead product portfolio, and expand into new application areas. In addition to continuing to serve the lead-acid battery industry, we plan to develop markets for other industrial and specialized lead products, such as radiation shielding materials, protective lead garments, and corrosion-resistant materials. This represents our first development direction. Second, in terms of raw material structure, we are considering expanding into other lead-containing feedstocks beyond spent lead-acid batteries and potentially introducing a certain proportion of lead concentrates to enhance the stability of raw material supply. In addition, the company is actively exploring the possibility of business transformation. Beyond secondary lead, we have already developed capabilities in recycled plastics. As for more specific transformation paths, these are still under evaluation and have not yet been finalized.

Asian Metal: Thank you, Mr. Wei, for your in-depth insights. We wish your company continued success in the industry.

Kun Wei: Thank you to Asian Metal for the invitation, and I wish your platform continued growth and success.