China’s secondary lead sector has been facing significant challenges in recent years, with declining demand and increasing competition leading to a capacity shakeout and structural exit. According to a recent analysis by SMM, the sector is at a tipping point, with many small and medium-sized enterprises (SMEs) struggling to remain profitable. The decline in demand for secondary lead has been driven by a number of factors, including the increasing use of lithium-ion batteries in electric vehicles and the growing demand for primary lead. As a result, many secondary lead producers have been forced to reduce production or exit the market altogether. The Chinese government has also implemented a number of policies aimed at reducing the environmental impact of the secondary lead sector, including stricter emissions standards and increased enforcement of regulations. These policies have led to a significant increase in production costs for many SMEs, making it even more difficult for them to remain competitive. In addition, the sector has also been impacted by the COVID-19 pandemic, which has led to a decline in demand for lead-acid batteries and other secondary lead products. Despite these challenges, there are still opportunities for growth and development in the secondary lead sector, particularly for companies that are able to invest in new technologies and improve their environmental performance. However, for many SMEs, the future looks bleak, and it is likely that the sector will undergo significant consolidation in the coming years. The capacity shakeout and structural exit that is currently underway in the secondary lead sector is likely to have significant implications for the broader lead industry, including the primary lead sector and the lead recycling industry. As the sector continues to evolve, it is likely that we will see a shift towards more sustainable and environmentally-friendly production methods, as well as increased investment in new technologies and innovations. The Chinese government is also likely to continue to play a key role in shaping the future of the secondary lead sector, through the implementation of policies and regulations aimed at reducing the environmental impact of the industry. In the short term, however, the outlook for the secondary lead sector remains challenging, with many companies facing significant difficulties in remaining profitable. The decline in demand for secondary lead is likely to continue, driven by the increasing use of lithium-ion batteries and other alternative technologies. As a result, it is likely that we will see a significant reduction in the number of secondary lead producers in China, as well as a decline in the overall capacity of the sector. The impact of the COVID-19 pandemic is also likely to be felt for some time, with many companies facing significant challenges in recovering from the decline in demand that occurred during the pandemic. Despite these challenges, however, there are still opportunities for growth and development in the secondary lead sector, particularly for companies that are able to invest in new technologies and improve their environmental performance. The sector is also likely to benefit from the growing demand for lead-acid batteries in certain niche applications, such as renewable energy systems and backup power systems. Overall, the future of the secondary lead sector in China is uncertain, but it is clear that the sector is at a tipping point, with a capacity shakeout and structural exit looming. The Chinese government, industry players, and other stakeholders must work together to ensure that the sector is able to transition to a more sustainable and environmentally-friendly model, while also supporting the growth and development of the industry. The secondary lead sector is a critical component of the broader lead industry, and its future will have significant implications for the environment, the economy, and society as a whole. As the sector continues to evolve, it is likely that we will see a shift towards more sustainable and environmentally-friendly production methods, as well as increased investment in new technologies and innovations. The sector is also likely to benefit from the growing demand for lead-acid batteries in certain niche applications, such as renewable energy systems and backup power systems. In conclusion, the secondary lead sector in China is facing significant challenges, but there are still opportunities for growth and development. The sector is at a tipping point, with a capacity shakeout and structural exit looming, but with the right policies and investments, it is possible to create a more sustainable and environmentally-friendly industry that supports the growth and development of the economy and society.