Futures Market:
Overnight, LME lead opened at $1,993.5/mt, fluctuated upward during the Asian session, and continued to rise in the European session, reaching a high of $2,011/mt. It then pulled back under pressure to a low of $1,990/mt and finally closed at $2,004/mt, up $11.5/mt or 0.58%. Overnight, the most-traded SHFE lead 2503 contract opened at 17,120 yuan/mt, briefly touched a high of 17,230 yuan/mt during early trading, then fluctuated downward after a short consolidation, and finally closed at 17,135 yuan/mt, up 90 yuan/mt or 0.53%.
Macro side, the US dollar fell 0.78% overnight. Initial jobless claims in the US met expectations, while manufacturing output in the Mid-Atlantic region slowed in February. These reports had minimal impact on the forex market and did not alter expectations that the US Fed will keep interest rates unchanged in the coming months. The Communist Party Committee of the People's Bank of China conveyed the key points of President Xi Jinping's important speech at the symposium on private enterprises. The meeting emphasized the implementation of a moderately loose monetary policy and detailed the 25 measures to support private economic development. It also stressed the need to further streamline equity, debt, and loan financing channels, increase the allocation of various financial resources, and address the challenges of high financing costs and difficulties faced by private enterprises, providing robust financial support for the healthy development and growth of the private economy.
》Click to View SMM Lead Spot Historical Prices
Spot Market Fundamentals: 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 showed a trend of opening low and moving higher, with suppliers generally offering at discounts. Cargoes quoted near parity faced difficulties in sales. Additionally, primary lead smelters quoted ex-factory prices at discounts of 50 yuan/mt to premiums of 100 yuan/mt against the SMM 1# lead average price, while secondary refined lead was quoted at discounts of 50-0 yuan/mt against the SMM 1# lead average price. Downstream battery producers maintained a cautious stance, with a preference for purchasing primary lead on a need-only basis. Some suppliers were reluctant to sell at low prices, reducing their selling enthusiasm compared to the previous day. Meanwhile, downstream enterprises exhibited strong wait-and-see sentiment, with some purchasing only as needed.
As of February 20, LME lead inventory decreased by 725 mt to 21,900 mt. According to SMM, as of February 20, the total social inventory of lead ingots across five major regions in China reached 59,600 mt, an increase of 7,300 mt compared to February 13 and an increase of 6,200 mt compared to February 17.
》Click to View SMM Metal Industry Chain Database
Lead Price Forecast:
This week, upstream and downstream enterprises in the lead industry chain operated normally, with increased production particularly from secondary lead producers. In major lead-producing regions such as Henan and Anhui, supply remained stable to slightly rising. Additionally, new capacity in regions like Guizhou and Jiangxi has come online, leading to an overall increase in refined lead supply outpacing demand. The accumulation trend in lead ingot inventory remains unchanged. On the downstream side, due to the mediocre performance of end-use consumption in the lead-acid battery market, production and procurement enthusiasm remained low. After lead prices weakened, some enterprises became cautious about purchasing, fearing further price declines, leaving circulating refined lead cargoes largely unsold. As of February 20, the spread between futures and spot prices continued to widen, increasing suppliers' willingness to transfer to delivery warehouses. The movement of in-plant inventory to delivery warehouses by smelters has not ceased despite the conclusion of the previous delivery cycle. Social inventory of lead ingots is expected to continue rising in the short term.
