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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.

Next week's key events include the US Fed's FOMC interest rate decision, with major economic data releases such as the US November Durable Goods Orders MoM, US December PPI YoY, and the eurozone's preliminary Q4 GDP YoY. Additionally, the recent Greenland incident unexpectedly reversed, with the US President denying any military seizure of Greenland, withdrawing tariff threats against Europe, and promoting high-level negotiations. However, regarding Iran, a 25% tariff will be imposed on all countries trading with Iran. On the LME lead front, overseas lead inventory reversed its trend and rebounded, surging by over 20,000 mt in a single day at the start of the week, overturning the previous destocking logic. This week, LME lead gave back all of last week's gains. Meanwhile, leading overseas lead smelters continue to advance plans for new US plant construction, while the consumption side shows no new highlights. We need to pay more attention to macro factors affecting lead prices. LME lead is expected to trade at $1,995-2,055/mt next week. Domestically, for SHFE lead, after prices fell below the 17,000 yuan/mt mark this week, secondary refined lead profits turned from positive to negative, prompting some secondary lead enterprises to schedule early maintenance or holidays, leading to a relative tightening in supply. However, primary lead enterprises resumed operations after maintenance, largely offsetting the overall supply changes. With less than a month until the Chinese New Year, attention should turn to downstream enterprises' pre-holiday stocking expectations. However, due to weak consumption in the largest lead consumption sector—the e-bike lead-acid battery market—pre-holiday stocking demand is expected to be limited, raising caution about further downside risks for lead prices. The most-traded SHFE lead contract is expected to trade at 16,950-17,300 yuan/mt next week. Spot price forecast: 16,850-17,100 yuan/mt. For primary lead, production resumption at primary lead enterprises, coupled with post-delivery supplies re-entering the circulation market, is expected to keep spot discounts difficult to change in the near term. For secondary lead, shrinking profits are dampening smelters' production enthusiasm, and production cuts have emerged in north China, with secondary refined lead discounts expected to hold or narrow slightly. On the lead consumption side, the lead-acid battery market's pre-holiday consumption performance remains weak, with large enterprises holding certain inventories and only some small and medium-sized enterprises beginning to plan pre-holiday stockpiling, providing limited support to lead prices.

Next week, key economic data to be released include China's full-year 2025 GDP growth rate, the US November core PCE price index annual rate, and the final US January University of Michigan Consumer Sentiment Index. Recent overseas geopolitical and tariff issues have emerged one after another, while the US stance has softened slightly, leading to a weakening of market risk aversion sentiment and a temporary pause in the price rise pace of gold and silver. Funds in the lead market trading will also focus on the current fundamentals. For LME lead, since January, overseas lead ingot inventory has been declining for half a month consecutively, with a cumulative reduction of nearly 34,000 mt. The destocking factors include improved lead consumption in Southeast Asia and imports to the Chinese market, supporting LME lead to continue holding up well. Next week, after the fund factor weakens, lead prices can still rely on the destocking factor to hover at highs. LME lead is expected to trade between $2,040-2,100/mt next week. Domestically, for SHFE lead, contrary to the overseas market, lead ingot inventory is gradually accumulating. In January, consumption in the largest consumption segment of the lead-acid battery market—the e-bike lead-acid battery market—weakened, downstream enterprise demand declined, and smelter plant inventory and social warehouses accumulated simultaneously, with spot discounts widening. It is expected that after the fund factor weakens subsequently, lead prices will pull back relatively. The most-traded SHFE lead contract will trade between 17,250-17,650 yuan/mt next week. Spot price forecast: 17,050-17,350 yuan/mt. For primary lead, smelter maintenance and resumption coexist, while current market circulating supply is ample. Additionally, after next week's delivery, supply will re-enter the circulation market, making spot market discount transactions more common. For secondary lead, haze warnings have been activated in some regions, leading to certain production cuts at secondary lead enterprises, which will appropriately ease the shipment pressure on smelters. However, before lead consumption improves, secondary lead will still trade at a discount. In terms of lead consumption, lead-acid battery market consumption shows no improvement yet. Particularly with high lead prices, downstream enterprises will maintain a state of just-in-time procurement.

Next week, as the New Year holiday concludes, both the LME and SHFE will resume normal trading. Macro data releases mainly include the US December ISM Manufacturing PMI, US December ADP employment, US December unemployment rate, and US December seasonally adjusted non-farm payrolls, with focus on their guidance for expectations regarding US Fed interest rate decisions. For LME lead, driven by the surge in silver and other precious metals, LME lead showed overall strength after returning from the Christmas holiday. Even as precious metals retreated after a rapid rise, LME lead demonstrated strong price resilience, supported by declining LME lead inventory. After the New Year holiday next week, the lead market will return to normal trading, and expectations for rising lead consumption in Southeast Asia in 2026 will support lead prices to fluctuate at highs. LME lead is expected to trade between $1,985-2,025/mt next week. Domestically for SHFE lead, after the frenzy in silver and other precious metals subsides, the lead market will also return to fundamentals. Post-holiday, primary lead enterprises resume production after maintenance; amid a supply-demand mismatch, the price center of lead is expected to move lower. However, considering the current social inventory base is below 20,000 mt and the supply gap for lead concentrates persists, lead prices possess some resistance to decline. The most-traded SHFE lead contract is expected to trade between 17,050-17,500 yuan/mt next week. Spot price forecast: 16,950-17,350 yuan/mt. Regarding lead consumption, downstream enterprises will resume regular procurement after the holiday, and spot market activity is expected to improve. However, the consumption loss due to downstream enterprise holidays during the festival period means this portion of inventory will take some time to digest. For primary lead, smelters gradually resume production; the supply increase will lead to more circulating spot cargo in the post-holiday market, and spot lead transactions at a discount are expected to increase. For secondary lead, regional production cuts by smelters will widen regional price differences for secondary refined lead, and mainstream regions will maintain discount transactions.

Next week, overseas markets will close early on December 24 and be closed on December 25 due to the Christmas holiday. There are few major macroeconomic data releases, such as China's 1-year loan prime rate on December 22, and the US preliminary Q3 real GDP annualized quarter-on-quarter growth rate and preliminary Q3 core PCE price index annualized quarter-on-quarter growth rate. The holiday atmosphere is strong in overseas markets, and lead market participants need to focus more on changes in the Chinese market. For LME lead, after the LME announced position limits at the start of the week, suppliers accelerated shipping to delivery warehouses, leading to a significant increase of 27,000 mt in LME lead inventory. LME lead prices fell to a nearly 7-month low. During this period, the LME lead Cash-3M contango narrowed to -$43.93/mt. Simultaneously, strike risks emerged at an Australian lead smelter, the US is set to add new lead smelting projects, and silver prices repeatedly hit new highs, further increasing demand for lead concentrates. Bullish and bearish factors are intertwined, and LME lead is expected to trade between $1,950/mt and $1,990/mt next week. Domestically, for SHFE lead, social inventory of lead ingots is at a 15-month low, and smelter inventory is also low, providing some support to lead prices. Supply-side dynamics are mixed, with primary lead smelters resuming production after maintenance, while secondary lead smelters are cutting production due to factors like raw materials and environmental protection. Additionally, as the year-end approaches, some upstream and downstream enterprises are closing their books, and spot market trading activity is expected to gradually decline next week. The most-traded SHFE lead contract is forecast to trade between 16,750 yuan/mt and 17,100 yuan/mt. Spot price forecast: 16,750-17,000 yuan/mt. For primary lead, major delivery brand smelters have resumed production, but environmental protection factors persist in some regions. Considering the low base of smelter inventory, suppliers are expected to continue holding prices firm. For secondary lead, falling lead prices are squeezing secondary refined lead producers' profits, and some regional smelters are cutting production, making it difficult to widen the discount for secondary refined lead. On the consumption side, downstream enterprises' purchasing enthusiasm is waning near year-end, and there is a tendency to recall funds. Spot trading activity is expected to weaken.

Next week, the US Fed will make an interest rate decision for December, with market expectations of a 25-basis-point interest rate cut, which weighed on the US dollar index recently. In terms of economic data, the US October JOLTs job openings, China's November CPI annual rate, and the US September wholesale sales monthly rate are expected to be released. On the LME lead side, LME lead inventory decreased by nearly 20,000 mt this week. The drawdown in lead ingot inventory boosted lead prices, pushing them above $2,000/mt. Meanwhile, the decline in the US dollar index may bring some upward expectations for lead prices. Lead prices are expected to hold up well next week, with LME lead trading in the range of $1,995–$2,035/mt. Domestically, for SHFE lead, regional supply of lead ingots tightened, and lead consumption improved relatively, with visible inventory falling to a 15-month low, supporting lead prices to hold up well. However, it is worth noting that in-factory inventories at lead smelters accumulated recently, and suppliers may ship to delivery warehouses before delivery, raising caution about a pullback after lead prices surge. The most-traded SHFE lead contract is expected to trade in the range of 17,100–17,550 yuan/mt next week. Spot price forecast: 17,050–17,400 yuan/mt. For primary lead, smelter inventory accumulated, and with stronger lead prices, spot premiums are expected to pull back. For secondary lead, smelters diverged in sales strategies, with some stockpiling in anticipation of price increases and others expanding discounts to sell. Premiums for secondary refined lead may decrease. On the lead consumption side, demand for lead-acid batteries improved relatively, with downstream enterprises purchasing as needed, but high lead prices suppressed some purchasing intentions.

Next week, key macroeconomic data releases include the US October unadjusted CPI YoY, US October retail sales MoM, China's October total retail sales of consumer goods YoY, and China's October industrial added value of enterprises above designated size YoY. This week, the Customs Tariff Commission of the State Council officially announced the continued suspension of the 24% tariff hike on US goods for one year, while maintaining a 10% tariff hike. The US federal government shutdown entered its 37th day, becoming the longest government shutdown in US history. With mixed macro news, lead market trading may focus more on fundamentals. On the LME lead side, overseas lead ingot destocking continued, with LME lead inventory declining by over 10kt weekly for three consecutive weeks. Notably, the LME lead Cash-3M contango narrowed to -$14.96/mt, reaching a high in nearly half a year, potentially supporting lead prices to hold up well. Additionally, the import arbitrage window for Chinese lead ingots shifted from profit to loss, making it unfeasible for overseas lead ingots to flow into the Chinese market, which may slow subsequent LME lead ingot destocking. Lead prices are expected to fluctuate at highs, with LME lead trading between $2,010-2,050/mt. Domestically, for SHFE lead, primary lead and secondary lead smelters gradually resumed operations after maintenance, while downstream enterprises also relatively recovered after production cuts. With both supply and demand for lead ingots increasing and the current low inventory base, lead prices held up well. Additionally, next week is the week before the SHFE lead delivery, where invisible inventory will turn into visible inventory, raising caution about the risk of prices retreating after a rapid rise. The most-traded SHFE lead contract is expected to trade between 17,300-17,650 yuan/mt next week. Spot price forecast: 17,150-17,400 yuan/mt. For primary lead, smelters plan to resume operations after maintenance, but air quality control in North China has not been lifted, prolonging lead ingot transportation cycles in some areas. Combined with the delivery factor, regional tightness in lead ingot supply may persist, and spot lead is expected to maintain a premium. For secondary lead, scrap battery supply is moderate, and secondary lead production is stable to increasing. Discounts for secondary refined lead may widen in some regions, but transaction prices in major consumption areas remain relatively firm. Regarding lead consumption, downstream enterprises basically maintain purchasing as needed, and current end-use consumption in the lead-acid battery market is sluggish, with some smaller enterprises implementing production cuts.

Next week, key macroeconomic data to be released include US October ADP employment, US October unemployment rate, and US October seasonally adjusted non-farm payrolls. Mid-week, the heads of state of China and the US met and reached a "trade truce." US Treasury Secretary Besant stated that the China-US trade agreement could be signed as early as next week. Additionally, the US Senate voted to terminate the comprehensive tariff policy implemented globally by former US President Trump. Furthermore, the China Nonferrous Metals Industry Association recommended considering setting capacity ceilings for bulk metals such as copper, lead, and zinc, and strictly controlling new capacity. Macro policy tailwinds have emerged frequently, with subsequent attention on specific policy announcements and their long-term impact on the lead industry chain. On the LME lead front, overseas lead ingot markets showed destocking, with LME lead inventory dropping again by over 10,000 mt weekly, while the LME Cash-3M contango narrowed to -$33.99/mt. Meanwhile, the US Fed cut interest rates by 25 basis points as expected, and China-US economic and trade teams reached a consensus, improving macro conditions and boosting lead prices to record eight consecutive gains. Macro tailwinds may continue to ferment next week, but with China's lead ingot import window narrowing, expectations for overseas lead ingots shifting to China have decreased. LME lead is expected to trade between $1,990/mt and $2,045/mt. Domestically, for SHFE lead, production cuts and halts at downstream lead enterprises have not fully ended, limiting improvement in lead consumption. Meanwhile, production increases and decreases coexist among secondary and primary lead producers, with secondary lead increments likely to exceed those of primary lead, potentially exacerbating expectations for subsequent lead ingot inventory buildup and weighing on lead prices. However, macro tailwinds remain effective, alleviating market pessimism. The most-traded SHFE lead contract is forecast to trade between 17,200 yuan/mt and 17,550 yuan/mt next week. Spot price forecast: 17,100–17,300 yuan/mt. For primary lead, although some lead smelters underwent maintenance, in-factory inventory accumulated at multiple enterprises, increasing spot circulating supply, and the proportion of spot discount transactions may rise. For secondary lead, smelters represented by those in Anhui gradually resumed production, leading to an overall supply increase, coupled with imported lead supplements, potentially further widening secondary lead discounts. On lead consumption, as production cuts and halts at some downstream enterprises end, producers will resume just-in-time procurement, but end-use consumption expectations remain weak, and downstream enterprises are likely to remain relatively cautious.

Next week, key macroeconomic data releases include China's official manufacturing PMI for October and the US annual core PCE price index for September. The US federal government shutdown entered its fourth week this week, as the temporary funding bill was again blocked in the Senate. Concurrently, with the upcoming US Fed interest rate meeting next week and the suspension of multiple economic data releases, Fed officials may face challenges in making partially "blind" judgments. Additionally, Vice Premier He Lifeng led a delegation to Malaysia from October 24 to 27 for economic and trade consultations with the US. On the LME lead front, LME lead inventory dropped by over 10kt on a weekly basis, while the LME Cash-3M contango narrowed to -$36.83/mt, boosting the price center upward. The import window for Chinese lead ingots further opened this week, and more lead ingots are expected to flow into the Chinese market, thereby easing high inventory pressure overseas. LME lead is forecast to trade between $1,980/mt and $2,030/mt. Domestically, for SHFE lead, from last week to this week, lead market supply shifted from regional tightness to widespread tightness, especially with scarce delivery brand primary lead supplies. October cargoes in some regions were sold out, with November cargoes being pre-sold. Combined with social inventory falling to a more than one-year low, lead prices held up well. However, it is noteworthy that the profit margin for lead ingot imports expanded, and new import deals were concluded. Subsequent upward momentum for lead prices is expected to slow. The most-traded SHFE lead contract is projected to trade between 17,350 yuan/mt and 17,800 yuan/mt next week. Spot price forecast: 17,100-17,450 yuan/mt. For primary lead, smelter production is gradually recovering, but due to significant pre-sales, October production at some enterprises has been sold out. Meanwhile, the spread between futures and spot prices widened, prompting suppliers to consider shipping to delivery warehouses. With the new long-term contract cycle starting next week, a significant increase in circulating supply is unlikely, and spot transactions may still occur at a premium (to SMM #1 lead). For secondary lead, smelters are gradually resuming operations after maintenance, but scrap battery prices have also risen, limiting both profits and production for secondary lead. Secondary refined lead is expected to trade only at a small discount. Furthermore, on the consumption side, after the sharp rise in lead prices, downstream enterprises have become more cautious in procurement. Coupled with the start of new monthly long-term contracts, their demand for spot cargo supplements may decrease.

Next week, key macroeconomic data to be released include China's Q3 GDP year-over-year growth rate and the US September non-seasonally adjusted CPI year-over-year rate. Currently, the US government shutdown has lasted over half a month. On October 16, the US Senate held its tenth vote on a temporary funding bill, which again failed to pass, with no immediate signs of the shutdown ending. Additionally, US Fed officials have sent dovish signals supporting interest rate cuts, overseas geopolitical tensions are prominent, gold prices have surged, and market expectations of a global economic downturn have intensified. For LME lead, macro news is bearish, coupled with increasing LME lead inventory, which rose over 10,000 mt this week. LME lead fell below the 2,000 integer mark, with its overall trading center moving lower. In the short term, numerous macro uncertainties persist, and overseas lead consumption underperforms compared to the domestic market. If lead inventories continue to accumulate, lead prices are expected to extend their decline. Meanwhile, the import window for Chinese lead ingots has opened, potentially leading to more lead ingots being diverted to the Chinese market, thereby mitigating the price decline. LME lead is forecast to trade between $1,955-2,005/mt. Domestically, for SHFE lead, lead consumption has performed better than expected. At the same time, supply from secondary lead production resumptions still requires some time to fully materialize, driving more demand toward the primary lead sector. This has led to a further decline in smelter inventory, with spot transactions tending at a premium (to SMM #1 lead), which may support lead prices to continue fluctuating at highs. The most-traded SHFE lead contract is expected to trade between 16,900-17,200 yuan/mt next week. Spot price forecast: 16,850-17,050 yuan/mt. For primary lead, smelters in north China face a mix of maintenance and production resumptions, compounded by transportation conflicts with the fruit and vegetable season, resulting in tight spot availability. Suppliers are refusing to budge on prices. For secondary lead, smelters restarting production encounter challenges such as scrap supply shortages and limited profits, constraining the expansion of secondary refined lead discounts. On the consumption side, downstream enterprises are seeing stable to rising production. Beyond long-term contract purchases, spot order procurement is gradually recovering as well.

Next week, key macro data releases include China's September CPI year-on-year, the US September seasonally unadjusted CPI year-on-year, and US September retail sales month-on-month. Meanwhile, the US Senate failed for the seventh time to pass a short-term funding bill to end the government shutdown, which has now entered its tenth day. The unresolved US government shutdown has caused staff shortages in some critical sectors and delayed the release of economic data. Reports indicate that over 90% of the US Securities and Exchange Commission staff are on leave, bringing IPO approvals and securities market supervision to a near standstill. On the LME lead front, LME lead inventory edged down this week. Notably, the LME cash-3M backwardation/contango narrowed to -$29.64/mt. Combined with strong demand for high-grade lead ingots in Southeast Asian markets, this may support lead prices to hold up well in the short term. However, with the US government shutdown still deadlocked and economic data releases postponed, market uncertainty persists, warranting caution against a pullback after rapid rise in lead prices. LME lead is expected to trade between $2,000/mt and $2,065/mt. Domestically, as the delivery date for the SHFE lead 2510 contract approaches next week, suppliers are moving stocks to delivery warehouses, which may raise expectations of a rise in visible inventory. Meanwhile, domestic secondary lead smelters are gradually resuming production after maintenance. Lead consumption, which was front-loaded in September, may lead to increased inventory buildup pressure in October. Additionally, recent lithium battery export control policies have sparked market speculation that some consumption expectations could shift back to lead-acid batteries, potentially supporting lead prices to hold up well in the short term. The most-traded SHFE lead contract is forecast to trade between 16,900 yuan/mt and 17,250 yuan/mt next week. Spot price forecast: 16,800–17,100 yuan/mt. For primary lead, smelters continue to resume production after the holiday. Ahead of the SHFE lead delivery, suppliers are moving stocks to delivery warehouses, which is expected to limit spot market availability, leading suppliers to refuse to budge on prices. For secondary lead, expectations of production resumptions by lead smelters in Anhui are rising, which may increase market supply next week and potentially widen the discount for secondary refined lead. On the demand side, October lead-acid battery market consumption is mixed, and pre-holiday stockpiling already front-loaded some lead demand. Downstream enterprises mostly maintain purchasing as needed.

Next week, due to China's National Day holiday, the SHFE will suspend night session trading on September 30, close from October 1 to 8, and resume normal trading on October 9. On the macro front, key data releases include China's official manufacturing PMI for September, US ADP employment, US ISM manufacturing PMI, US unemployment rate, and US seasonally adjusted non-farm payrolls for September. While domestic markets are closed, overseas markets will operate as usual, requiring continued attention to geopolitical developments and the US government shutdown warning. LME lead, overseas geopolitical tensions remain prominent, and with tariff impacts persisting, lead consumption remains subdued, while demand for lead concentrates rises, driving TCs lower. For instance, TCs for imported concentrates in China continue to decline. Amid supply-demand stalemate, lead prices are consolidating at high levels. Additionally, the opening of China's lead import arbitrage window may shift some inventories to China, potentially supporting prices. Meanwhile, monitor overseas macro developments; during China's holiday, LME lead may hold up well. LME lead is expected to trade at $1,990-2,030/mt. Domestically, SHFE lead will have only two trading days next week due to the National Day holiday. Downstream enterprises are about to enter holidays, and lead smelters are actively destocking pre-holiday inventories, which may slow down the destocking speed of lead ingots later. Furthermore, with the lead import window open, some downstream or smelting enterprises have pre-ordered imported lead ingots arriving in October, potentially pressuring lead prices lower in October. Before concentrated production resumptions at secondary lead plants and arrival of imported lead, prices are likely to consolidate, but weaken after supply increases materialize. The most-traded SHFE lead contract is expected to trade at 16,900-17,200 yuan/mt next week and post-holiday. Spot price forecast: 16,800-17,100 yuan/mt. Primary lead, smelters continue to resume after maintenance, but pre-holiday sellable inventories are limited, so spot prices are expected to refuse to budge. Secondary lead, smelters are gradually resuming, and with competition from imports, discounts in some regions may widen. However, before concentrated production resumptions in Anhui, discounts in major producing areas are unlikely to expand significantly. Demand side, downstream enterprises' pre-holiday stockpiling is winding down, leaving only rigid demand; market activity is expected to decline. Post-holiday, focus will be on inventory transfers for delivery against the SHFE lead 2511 contract.

At the SMM Indonesia Seminar: Li-ion Battery & Energy Storage hosted by SMM, Lesley Yang, Senior Battery Materials Analyst at SMM, delivered an in-depth analysis of the development prospects of ternary cathode precursor materials and LFP cathode materials in Indonesia. Downstream Demand: Current Status and Forecast Global NEV Market Review and Outlook The NEV market has experienced explosive growth over the past six years, with global sales surging from approximately 2 million units in 2018 to nearly 17 million units in 2024, an increase of more than sevenfold. This growth has been primarily policy-driven: Europe has set emission reduction targets for 2030 and plans to ban the sale of internal combustion engine vehicles by 2035, accelerating automakers' transition; China, relying on its "dual-carbon" goals, has effectively boosted market demand through the "dual-credit" policy, purchase tax reduction and exemption, and replacement subsidies. This period can be regarded as a typical "policy-driven expansion phase." Currently, the NEV penetration rate in China has exceeded 50%. As subsidies gradually phase out, market competition is shifting toward product strength, brand, and innovation. In emerging markets such as India, Southeast Asia, and Latin America, where penetration rates remain below 10%, subsidies and government incentives are still the main drivers. Global NEV sales are expected to exceed 31 million units by 2030, though the growth rate will gradually slow down. In terms of product structure, BEV models will continue to dominate the market, but plug-in hybrid models are performing well in the short term in China and Europe. In emerging markets, affordable small EVs priced below $15,000 are expected to be key to widespread adoption. The ESS market is also experiencing rapid growth. SMM expects global ESS demand to grow from 312 GWh in 2024 to over 1,000 GWh by 2030. China remains the largest growth engine, accounting for over 40% of the market share. As power market reforms advance, energy storage systems can achieve profitability through auxiliary services and the spot market, coupled with the increasing proportion of renewable energy and continuously declining costs. The economics of ESS projects have significantly improved, gradually reducing reliance on policy support. The growth of the US ESS market mainly relies on fiscal incentives, with tax credit policies extended to 2034, providing long-term certainty for PV plus ESS and standalone ESS projects. However, its development still faces challenges such as grid connection bottlenecks and inconsistent policies across states. Europe, on the other hand, is driven by regulatory policies, with the EU Renewable Energy Directive requiring a 42.5% share of renewable energy by 2030, where ESS plays a crucial role in ensuring grid stability and energy security. Global Cathode Material Capacity and Competitive Landscape LFP batteries, due to their cost advantages, are widely used in NEVs and the ESS sector; ternary batteries, however, target the mid-to-high-end market to meet high energy density demands. In terms of cathode material energy density, ternary materials increase with higher nickel content, with 3-series at about 155 mAh/g and 9-series exceeding 210 mAh/g, suitable for high-performance applications. LFP materials steadily improve energy density through compaction density iterations, with second-generation products reaching 155 mAh/g and fourth-generation expected to exceed 160 mAh/g. Although LFP materials have lower energy density compared to ternary cathode materials, they are widely adopted due to their cost, safety, and cycle life advantages. China dominates the LFP material supply chain, with domestic LFP cathode material capacity expected to exceed 6.7 million mt by the end of this year. The market concentration of LFP cathode materials is declining, with the top five enterprises' market share dropping from 61% at the beginning of 2024 to 55% in 2025, making the speed of technological iteration a key factor for companies to capture the market. Internationalization has become an important strategy for leading LFP producers. By 2028, overseas LFP material annual capacity is expected to reach 600,000 mt, with the global supply landscape becoming more diversified. Chinese enterprises lead this process, establishing production sites in the US, Spain, Poland, Malaysia, and Indonesia, while Japanese and South Korean companies also join the competition. This year, Lopal and Lithium Source will achieve 120,000 mt of capacity in Indonesia, marking that although the current LFP market is dominated by China, the future landscape will also depend on global cooperation and overseas manufacturing layouts. For ternary cathode precursors, in 2025, China will still account for nearly 80% of global capacity, followed by Japan, South Korea, and Indonesia. Especially in Indonesia, with continuous investment from Chinese enterprises, capacity is expected to grow significantly. Despite the slowdown in the NEV industry and domestic overcapacity, Chinese producers are accelerating their overseas expansion, with Southeast Asia and Europe becoming the key regions for new capacity. From 2024 to 2030, the global ternary cathode precursor capacity is expected to have a CAGR of 0.7%. In 2025, China's share of global ternary cathode material capacity will be 65%, followed by South Korea, Europe, and Japan. Europe, with its geographical advantages, local battery capacity, and trade policies, becomes the preferred destination for Chinese enterprises' overseas expansion. By 2030, overseas ternary cathode annual capacity will increase from the current 980,000 mt to 1.28 million mt, while China's new capacity will be less than 100,000 mt. From 2024 to 2030, the global ternary cathode material capacity is expected to have a CAGR of 3.6%. In ternary cathode materials, mid-nickel and high-nickel ternary materials are the trend. By 2030, the market share of 8-series and 9-series ternary materials is expected to exceed 50%, with 6-series accounting for about 30%. NCA remains a niche, with a 9% market share expected by 2030. Currently, the Chinese market is dominated by 6-series and 8-series, accounting for more than two-thirds of demand; the overseas market, however, is highly inclined towards 8-series (over 55%), with NCA still holding about 20% of the market share. Strategic Position of Battery Materials in Indonesia Indonesia not only boasts the world's richest nickel resources, with annual production exceeding 1 million mt, primarily laterite nickel ore, a key raw material for producing ternary cathode precursors, but it is also transforming from a resource supplier into a strategic hub for the global battery and NEV ecosystem. According to public data, CATL, BTR, Huayou Cobalt, Gotion High-tech, Lopal, BYD, and LG Energy Solution have all established a presence there. According to SMM forecasts, by the end of 2025, Indonesia's annual ternary cathode precursor capacity is expected to reach 80,000 mt, and further increase to around 115,000 mt by 2028. Meanwhile, the capacity growth rate for LFP cathode material is even more significant, projected to surge from 120,000 mt in 2025 to 260,000 mt in 2030, with an average annual compound growth rate of 17%.

Next week, key macro data include the US Q2 real GDP annualized quarter-on-quarter final value, the US August core PCE price index year-on-year, and the US September one-year inflation rate expectation final value. The US Fed cut interest rates as expected this week, marking the first interest rate cut in 2025 and signaling current economic downside risks. For LME lead, LME lead inventory declined for the fourth consecutive week, but the LME lead 0-3 premium and discount remained at a wide discount, approaching -$50/mt during the week. Due to factors such as tariffs, lead-acid battery market consumption expectations weakened in overseas Southeast Asian markets, and spot market circulating supply increased, indicating a mismatch between actual consumption and LME lead inventory destocking, providing limited support for lead prices. Meanwhile, the SHFE/LME price ratio expanded, and some lead ingots will flow into the Chinese market. Additionally, with high demand for lead concentrates, China's imported ore TC fell further, which may provide some support for lead prices. LME lead is expected to trade at $1,990-2,020/mt next week. Domestically, for SHFE lead, next week is the week before the National Day holiday. Downstream enterprises still have pre-holiday stocking demand expectations. Meanwhile, primary lead smelters resumed production after maintenance, secondary lead losses narrowed, some enterprises plan to resume production, and a small amount of imported lead will arrive in China around month-end. Overall, bullish and bearish factors are intertwined. Considering the low expectation of inventory buildup before the holiday, lead prices may hover at highs. The most-traded SHFE lead contract is expected to trade at 16,950-17,250 yuan/mt next week. Spot price forecast: 16,850-17,100 yuan/mt. For primary lead, smelters resumed production after maintenance, and delivery sources re-entered the circulation market, so tight spot supply may ease relatively. For secondary lead, smelters are progressing with production resumptions, and imported crude lead supplements are available, raising expectations for secondary lead enterprise production resumptions, though it will take some time for output to contribute. Overall, before the National Day holiday, downstream enterprises still have some stocking demand, and with current low smelter inventory, primary lead is expected to refuse to budge on prices for shipments. Meanwhile, due to regional supply differences, the price spread for refined lead by region widened, and premium trades (against the SMM #1 lead average price) decreased for secondary lead.

Next week's key event will be the US Fed FOMC meeting, where interest rate decisions and the Summary of Economic Projections will be announced. This meeting has drawn significant market attention, as it marks the second time since the Fed began its interest rate hike cycle in March 2022 that expectations for an interest rate cut have emerged. The first occurred in September 2024, and a year later, the Fed may cut interest rates again, with the market anticipating a 25 basis point cut. Meanwhile, the National Development and Reform Commission (NDRC) stated that efforts will be made to achieve the annual economic and social development targets, with H2 continuously releasing domestic demand potential. On the LME lead side, LME lead inventory has been declining for over half a month, with a further drop of 13,500 mt this week. However, the boost to LME lead prices has been relatively limited. During the week, LME lead prices dipped before rebounding, with the LME lead cash-3M contango widening, latest reported at -$42.99/mt. Next week, lead market trading should focus on the Fed meeting, where the expected interest rate cut is anticipated to materialize, lifting the center of LME lead prices. It is expected to trade between $1,980-2,020/mt. Domestically, for SHFE lead, maintenance at primary lead and secondary lead smelters continues. With only half a month until the National Day holiday, the market is awaiting downstream stockpiling ahead of the holiday, which may support lead prices to hold up well. However, it is worth noting that the SHFE/LME lead price ratio has recently widened, and the import window for lead ingots is expected to open soon. If the window opens, it may offset domestic lead smelter production cuts, raising the risk of lead prices jumping initially and then pulling back. The most-traded SHFE lead contract is expected to trade between 16,800-17,200 yuan/mt next week. Spot price forecast: 16,700-17,000 yuan/mt. On the lead consumption side, lead-acid battery enterprises are operating relatively steadily. With the National Day holiday approaching, downstream stockpiling ahead of the holiday may benefit lead consumption. For primary lead, the SHFE lead 2510 contract will enter delivery next week, and short-term spot supply is expected to decrease, though it may re-enter the market later in the week. Spot lead discounts are expected to remain difficult to narrow. For secondary lead, smelters are generally cutting production and undergoing maintenance, with regional supply tightness continuing. Meanwhile, scrap battery prices have softened and declined, improving secondary lead profitability. It is possible that secondary lead trading may see expanded discounts in the future.