Futures:
Overnight, LME lead opened at $2,073.5/mt. Influenced by funds during Asian trading hours, LME lead fluctuated upward, reaching a peak of $2,086/mt during the session, marking a new high for nearly two months. Subsequently, as the upward momentum in metals such as silver and copper slowed down and began to retreat, LME lead also gave up most of its gains, ultimately closing at $2,058.5/mt, down by 0.6%.
Overnight, the most-traded SHFE lead 2602 contract opened at 17,725 yuan/mt. Affected by the correction in non-ferrous metals, SHFE lead gradually gave up its intraday gains after opening, hitting a low of 17,510 yuan/mt. During the latter half of the trading session, bulls and bears continued to battle, with SHFE lead fluctuating between 17,575 yuan/mt and 17,650 yuan/mt, ultimately closing at 17,650 yuan/mt, down by 0.23%. Its open interest stood at 50,706 lots, a decrease of 1,303 lots from the previous trading day.
On the macro front:
Eight departments including the Ministry of Industry and Information Technology (MIIT): Accelerate the upgrade of intelligent terminals, and achieve safe and reliable supply of key core technologies for artificial intelligence in China by 2027. The US will "consign" Venezuelan oil and demand that Venezuela sever its economic ties with China and Russia. China's Foreign Ministry responded, calling it a typical act of bullying. US ADP employment grew by 41,000 in December, reversing November's decline but falling short of growth expectations; US JOLTS job openings fell to a more-than-one-year low in November, dropping below the number of unemployed for the first time in four years, with hiring slowing down; US ISM services PMI hit 54.4 in December, a more-than-one-year high, with robust demand and hiring recovering.
:
In yesterday's lead spot market, amid a euphoric atmosphere in non-ferrous metals driven by funds, SHFE lead rose sharply. Suppliers were mostly active in selling, but the availability of circulating cargoes in the Jiangsu, Zhejiang, Shanghai market was limited, with suppliers primarily relying on cargoes self-picked up from production site. Premium quotations in mainstream producing regions were adjusted downward, ranging from a discount of 30 yuan/mt to a premium of 50 yuan/mt against the SMM #1 lead average price. Meanwhile, the regional disparities in quotations from secondary lead smelters widened, with some expanding discounts to actively sell, while others with limited supply held firm quotations. Secondary refined lead was quoted at a discount of 200-0 yuan/mt against the SMM #1 lead average price ex-works. Additionally, downstream enterprises generally adopted a wait-and-see attitude, with just-in-time procurement being the exception, and most relying on long-term contracts for purchases, resulting in sluggish trading in the spot market.
Inventory: As of January 7, LME lead inventory decreased by 2,925 mt to 230,425 mt, with the main declines occurring in Kaohsiung and Singapore. Additionally, SMM's social inventory of lead ingots across five locations rose slightly compared to before the holiday.
Today's lead price forecast:
The euphoric rally driven by domestic and overseas funds has temporarily come to an end, with lead prices returning to fundamentals. Given the still-low base of visible lead ingot inventory, there is certain support for prices. Meanwhile, the supply of raw materials such as lead concentrates and scrap remains tight. In particular, scrap recyclers are holding onto their stocks in anticipation of higher prices, with attention on whether the pullback in lead prices will squeeze recyclers' inventories and lead to shipments to smelters. Additionally, it is worth noting that due to the recent high lead prices, downstream enterprises have generally reduced or suspended procurement, leading to a noticeable upward trend in the in-factory inventory of lead smelters. Attention is focused on the subsequent flow of lead ingots to warehouses near consumption areas and the possibility of shipments to delivery warehouses.
Data Source Statement: Except for publicly available information, other data are processed by SMM based on public information, market communication, and SMM's internal database model, and are for reference only, not constituting decision-making advice.
