Futures Market:
Overnight, LME lead opened at $1,983.5/mt, fluctuated upward during the Asian session, and continued to rise in the European session, reaching a high of $2,006.5/mt. It then pulled back under pressure and finally closed at $1,982.5/mt, up $0.5/mt or 0.03%. Overnight, the most-traded SHFE lead 2503 contract opened at 17,200 yuan/mt, hit a high of 17,250 yuan/mt in early trading before declining to a low of 17,150 yuan/mt. It then slightly rebounded and finally closed at 17,180 yuan/mt, up 40 yuan/mt or 0.23%.
》Click to View SMM Lead Spot Historical Prices
Macro: Overnight, the US dollar index fell by 0.06% to 106.73, marking its third consecutive decline. Last Friday, US retail sales unexpectedly dropped, raising concerns about the health of the US economy. Investors tend to estimate that the US Fed will cut interest rates twice this year. Domestically, Xi Jinping, General Secretary of the CPC Central Committee, President of China, and Chairman of the Central Military Commission, attended a symposium with private enterprises in Beijing on the morning of February 17.
In the Shanghai market, Honglu lead was quoted on par with the SHFE lead 2503 contract. In Jiangsu and Zhejiang regions, JCC and Jijin lead were quoted at discounts of 20-0 yuan/mt against the SHFE lead 2503 contract. SHFE lead remained in a consolidation trend, and suppliers followed the market to sell. As yesterday was the delivery day for the SHFE lead 2502 contract, some suppliers focused on delivery matters, and spot discounts were basically flat WoW. Meanwhile, primary lead smelters quoted ex-factory prices at discounts of 50 yuan/mt to premiums of 150 yuan/mt against the SMM 1# lead average price, while some traders offered discounts as deep as 75 yuan/mt. For secondary lead, secondary refined lead was quoted at discounts of 150-0 yuan/mt against the SMM 1# lead average price ex-factory. Downstream demand remained weak, with most purchases made under long-term contracts, while some rigid demand leaned towards the lower-priced secondary lead. The spot market for small orders saw muted transactions. During the morning session, mainstream ex-factory quotes for secondary refined lead were at discounts of 125-0 yuan/mt against the SMM 1# lead average price, while mainstream ex-factory quotes for tax-free refined lead ranged from 15,900-16,000 yuan/mt, with some cargoes deliverable within industrial parks at 16,050 yuan/mt. Battery producers showed moderate inquiry activity but remained cautious in their purchase willingness.
Inventory: As of February 17, LME lead inventory decreased by 1,550 mt to 222,425 mt. According to SMM, as of February 17, the total social inventory of lead ingots in five major regions tracked by SMM reached 53,400 mt, up by 7,200 mt from February 10 and by 1,100 mt from February 13.
》Click to View SMM Metal Industry Chain Database
Lead Price Forecast Today:
Over the weekend, lead ingots continued to arrive at social warehouses, fulfilling expectations of inventory transfers for delivery. Early this week, inventories are expected to continue rising. Recently, although downstream enterprises have mostly resumed operations, their demand for lead ingots has been weak. Spot prices in various regions have shifted from premiums to discounts, with the discount range widening. As of February 17, suppliers in Henan and Hunan quoted ex-factory prices for self-picked cargoes at discounts of 50-0 yuan/mt against the SMM 1# lead average price, with the spread between futures and spot prices exceeding 200 yuan/mt. After the Lantern Festival, scrap battery supply has slightly eased, but secondary refined lead production is not expected to see significant growth in February. Secondary refined lead was quoted at discounts of 150-0 yuan/mt against the SMM 1# lead average price ex-factory. Downstream enterprises have more options for rigid demand, and the existing lead ingot inventory is being consumed slowly. In the short term, lead prices are likely to remain under pressure.
