Next week, key economic data include the US January ISM Manufacturing PMI, US January ADP employment (in 10,000s), US January unemployment rate, and US January seasonally adjusted nonfarm payrolls (in 10,000s). Recently, risk events have increased significantly, including escalating geopolitical tensions in Iran and a heightened possibility of another partial US government shutdown by month-end due to depleted funds. The lead market itself has also seen significant developments: on January 30, the SHFE released a draft revision to lead futures, proposing the introduction of secondary lead as an alternative delivery brand for lead futures, which is currently in the public comment period.
On the LME lead side, this week saw sharp fluctuations in precious and nonferrous metals, with both capital frenzy and withdrawal occurring simultaneously, leading to roller-coaster trends in multiple categories. Lead price movements remained relatively close to fundamentals, fluctuating downward overall and falling below the key $2,000/mt level. As the Chinese New Year holiday approaches, lead ingot exports from regions like Southeast Asia to China have gradually decreased. Even during periods of declining lead prices, the LME lead Cash-3M contango did not narrow, reported at -$47.72/mt. Subsequent attention should focus more on impacts from related metals such as silver and copper. LME lead is expected to trade between $1,965/mt and $2,025/mt next week.
For SHFE lead, continuous inventory buildup of domestic lead ingots has weighed on lead prices, pushing them lower. Entering February, the Chinese New Year atmosphere in the lead market will intensify, with lead smelters and lead-acid battery enterprises gradually entering holiday shutdowns, leading to a dual decline in lead ingot supply and demand. Additionally, the SHFE's proposal to introduce secondary lead as an alternative delivery brand for lead futures implies a larger deliverable volume of lead ingots, which may impact market sentiment in the short term. The most-traded SHFE lead contract is expected to trade between 16,600 yuan/mt and 17,100 yuan/mt next week.
Spot price forecast: 16,500–16,850 yuan/mt. As the Chinese New Year holiday approaches, upstream and downstream enterprises in the lead industry chain will gradually reduce production and enter holidays, leading to a dual decline in lead ingot supply and demand. From the perspective of spot lead trading, the impact of downstream enterprise holidays is more pronounced. Before logistics halt, next week will be the final pre-holiday stockpiling period for downstream enterprises, but expectations remain weak. Both lead smelters and traders will actively clear inventories. If lead prices fall further, smelting costs will be the main factor limiting the expansion of spot discounts.
