Divergence in Domestic and International Inventory Trends; Short-Term Lead Prices Are Still Constrained by Raw Materials and Consumption [SMM Weekly Lead Market Forecast]

SMM, February 28: Next week, key macroeconomic data will include China's February Caixin Manufacturing PMI, the US February ISM Manufacturing PMI, the US February ADP employment figures (in 10,000s), the US February unemployment rate, and the US February seasonally adjusted non-farm payrolls. Additionally, the US Fed will release the Beige Book on economic conditions. Meanwhile, the US-China trade friction remains prominent, with the US threatening to impose additional tariffs, which will continue to impact the commodity markets. For LME lead, LME lead inventory declined during the week, and the LME lead 0-3 spot discount narrowed, closing at -$17.74/mt as of February 27. The trading center of LME lead slightly moved upward. At the same time, expectations for the US imposing additional tariffs on goods from multiple countries have risen, and uncertainties in international trade have suppressed the performance of base metals, limiting the upside potential for lead prices. LME lead is expected to trade between $1,985/mt and $2,045/mt next week. For domestic SHFE lead, entering March, the impact of the Chinese New Year holiday has subsided, and the overall supply and demand in the lead market are expected to increase. From a weekly marginal perspective, the supply side is expected to see slight growth, while the demand side remains stable, with visible lead ingot inventory still having room for accumulation. On the other hand, raw material supply remains tight, and due to expectations for production increases on the supply side, prices of raw materials such as scrap remain relatively firm. The stalemate between bullish and bearish factors is unlikely to break in the short term. The most-traded SHFE lead contract is expected to trade between 16,950 yuan/mt and 17,300 yuan/mt next week. Spot price forecast: 16,750-17,000 yuan/mt. Lead consumption remains moderate, with downstream enterprises maintaining a produce-based-on-sales model, leading to relatively scattered procurement of lead ingots. On the supply side, lead smelters are resuming production and advancing new capacity projects, with primary and secondary lead likely to trade at discounts. However, due to raw material cost factors, the room for widening spot discounts is limited.

SMM

Divergence in Domestic and International Inventory Trends; Short-Term Lead Prices Are Still Constrained by Raw Materials and Consumption [SMM Weekly Lead Market Forecast]

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