Futures Market:
Last Friday, LME lead opened at $1,935/mt. Against the backdrop of continuously declining LME lead inventory, LME lead rebounded after testing lower levels. The overall trading center of LME lead shifted upward, with intraday highs reaching $1,985/mt, marking a new high in nearly one and a half months. By the close, it settled at $1,981/mt, up 2.3%.
Last Friday, the most-traded SHFE lead 2502 contract opened at 16,665 yuan/mt. Ahead of the Chinese New Year, downstream sectors gradually restocked, leading to expected destocking of lead ingots. SHFE lead also rebounded, with early trading pushing it to 16,725 yuan/mt. However, concerns over weakening consumption persisted, and during the latter half of the session, SHFE lead fluctuated between 16,625-16,700 yuan/mt, eventually closing at 16,660 yuan/mt, up 1.22%. Its open interest stood at 38,570 lots, down 277 lots from the previous trading day. Additionally, the SHFE lead 2502 contract has been gradually rolling over to the SHFE lead 2503 contract, with attention on the contract rollover of the most-traded contract.
》Click to View SMM Lead Spot Historical Prices
Macro Front: The PBOC temporarily paused open market bond purchases. Relevant institutions believe that future RRR cuts and interest rate cuts will continue, but the pace may depend on multiple factors. Is the Biden administration planning to issue new "anti-China" regulations before leaving office? Foreign media reports suggest that the US may finalise rules next week restricting China's automotive hardware and software.
Last Friday, in the lead spot market, SHFE lead rebounded after testing lower levels, and suppliers quoted prices in line with the market to offload cargoes. Regional price differences for ex-factory primary lead cargoes persisted, while secondary refined lead suppliers stood firm on quotes. Downstream enterprises purchased as needed, buying the dip, with some low-priced primary lead cargoes quickly sold out. Spot market trading activity increased. For primary lead, smelter inventories declined, and spot order quotations decreased, with some ex-factory prices quoted at premiums of 0-200 yuan/mt against the SMM 1# lead average price. In mainstream trade markets such as Jiangsu, Zhejiang, and Shanghai, domestic lead mainstream quotations were at premiums of 50-80 yuan/mt against the SHFE lead 2502 contract. For secondary lead, battery scrap prices were more likely to rise than fall, secondary lead smelting profits remained thin, and smelters were reluctant to sell at low prices. Secondary refined lead was quoted at premiums of 50-100 yuan/mt against the SMM 1# lead average price ex-factory.
Inventory: As of January 10, LME lead inventory decreased by 1,875 mt to 225,725 mt. As of January 9, the total social inventory of SMM lead ingots across five regions stood at 46,000 mt, down 6,900 mt from January 2 and 2,300 mt from January 6.
》Click to View SMM Metal Industry Chain Database
Lead Price Forecast Today:
Recently, environmental protection-driven production restrictions at secondary lead smelters have been lifted, increasing the availability of spot cargoes. However, pre-holiday downstream restocking expectations have been only partially realised, leading to relatively slow destocking of lead ingots. Spot premiums in mainstream regions have declined, with some areas dropping to near parity (against the SMM 1# lead average price or the SHFE lead 2502 contract). Additionally, this week, the earliest batch of downstream enterprises is expected to begin halting operations for the holiday, gradually weakening lead consumption. Coupled with logistics suspensions, spot trading is expected to turn sluggish, and lead prices are likely to continue fluctuating downward.
