Futures: On Friday evening, LME lead opened at $2,098/mt, fluctuated downward after the opening, and continued to decline during the Asian trading session. It hit a low of $2,036.5/mt before closing, finally settling at $2,038/mt, down by $58.5/mt, or 2.79%. On Friday evening, the most-traded SHFE lead contract opened higher with a gap at 17,400 yuan/mt. At the beginning of the session, it was dragged down by the weakening LME lead, quickly breaking through the support level of 17,300 yuan/mt, then fluctuated and tested the low of 17,200 yuan/mt, finally closing at 17,230 yuan/mt, down by 365 yuan/mt, or 2.07%. This week, the US Supreme Court may rule on the Trump tariff case; the independence of the US Fed will face a major test as the Supreme Court hears the case of Fed Governor Cook; Japan's Prime Minister may dissolve the House of Representatives and hold an early general election, and the Bank of Japan will announce its interest rate decision. Several EU countries are considering imposing additional tariffs on 93 billion euros worth of US goods exported to Europe, or restricting access for US enterprises to the EU market, in retaliation against President Trump's tariffs on eight European countries for his interest in Greenland. The renewed tariff threats between the US and Europe led to a significant rise in gold and silver prices, while stock index futures fell by 1%. On Monday's opening, spot gold and silver opened higher with a gap. According to the announcement by the People's Bank of China, starting from January 19, the relending and rediscounting rates were cut by 0.25 percentage points. The CSRC held the 2026 system work conference, emphasizing the need to maintain stability and consolidate the positive momentum in the market. Spot fundamentals: In Shanghai, Honglu lead was quoted at premiums of 80 yuan/mt against the SHFE 2602 contract. After SHFE lead pulled back from its high, suppliers adjusted their quotations according to the market, mainly offering cargoes self-picked up from primary lead smelters. Spot lead was generally quoted at discounts, with mainstream production areas quoting 60-0 yuan/mt below the SMM #1 lead average price. Secondary lead smelters had high inventories, and secondary refined lead was quoted at 300-100 yuan/mt below the SMM #1 lead average price. In some regions, smog warnings were issued, leading to partial production restrictions for lead smelters, which is expected to ease the pressure on suppliers to sell. Downstream enterprises had limited rigid demand, with a strong wait-and-see sentiment, few inquiries, and most enterprises focusing on digesting inventories, resulting in persistently weak transactions in the spot market. Inventory: On January 16, LME lead inventory decreased by 5,050 mt to 206,350 mt. As of January 15, the social inventory of lead ingots in five regions tracked by SMM showed an upward trend. Today's lead price forecast: For primary lead, smelters are undergoing both maintenance and resumption, but the current market has ample circulating supplies, making it difficult to improve the situation of discount transactions in the spot market. For secondary lead, smog warnings in some regions have led to production cuts, temporarily easing the pressure on smelters to sell. However, before lead consumption improves, the extent of discounts for secondary lead is expected to be limited. In January, consumption in the lead-acid battery market, the largest segment being the e-bike lead-acid battery market, weakened, with demand from downstream enterprises declining, and inventories at smelters and social warehouses accumulating simultaneously, while spot discounts widened. With macroeconomic positives exhausted, and amid a general decline in non-ferrous metals last Friday night, lead prices nearly erased all gains from the previous week. In an environment of weak consumption, lead prices are likely to remain in the doldrums this week.

Secondary lead production fell in December 2025, down 5.03% MoM but up 10.3% YoY. Secondary refined lead production dropped 9.33% MoM and increased 0.84% YoY.

[Vietnam's Capital Plagued by Severe Smog, Government Urges Factory Output Cuts] According to CCTV News, Hanoi, the capital of Vietnam, has been grappling with severe smog for several consecutive days. Data from the air pollution information app AirVisual showed that at noon on December 11th, Hanoi's Air Quality Index (AQI) reached 243, placing it as the fourth most air-polluted city globally. In terms of PM2.5 concentration, the pollution level in Hanoi might be approximately 50 times higher than the World Health Organization's recommended standard of 5 micrograms per cubic meter. Earlier this week, the city also topped the list of the world's most air-polluted cities on multiple occasions. In response to the pollution, the Vietnamese Ministry of Health urged power, steel, and chemical plants to reduce production output earlier this week. Hanoi also plans to implement a ban on gasoline-powered motorcycles in parts of the city center from mid-2026, with the prohibition to be gradually extended to fuel-powered cars thereafter. Reports indicate that motorcycles are the primary mode of transport for Hanoi residents, with the city hosting around 7 million motorcycles and over 1 million cars.

The operating rate of leading downstream aluminum processing enterprises in China this week was 62.4%, down 0.1% WoW, showing a characteristic of "stabilization during the peak season with internal divergence." Specifically, the operating rate for primary aluminum alloy rose 0.6 percentage points to 59.0%, as enterprise production schedules became more aligned, supported by stable restocking from downstream, and is expected to remain stable with a slight upward trend in the short term. The operating rate for aluminum plate/sheet and strip fell 1 percentage point to 67.0%, impacted by declining curtain wall panel orders and high aluminum prices suppressing purchases, with weakening demand expectations strengthening, and it is anticipated to gradually enter the off-season range. The operating rate for aluminum wire and cable increased 0.4% to 64.4%, supported by the high-voltage sector, but tight shipments and slow cargo pick-up by State Grid limited the rebound potential. The operating rate for aluminum extrusion edged up to 53.7%, with automotive extrusion showing relatively robust growth driven by the year-end push for targets, while construction extrusion remained sluggish and PV extrusion faced production cuts. The operating rate for aluminum foil decreased 0.4 percentage points to 71.9%, with export stockpiling for holidays in packaging foil providing a buffer, but orders for some categories have started to weaken. The operating rate for secondary aluminum producers remained at 58.6%, with order resilience still present, but tight raw material supply, profit pressure, and policy uncertainties continued to constrain production flexibility. Considering the performance on both supply and demand sides, SMM expects the operating rate for the downstream aluminum processing industry to continue its stable trend next week.

[SMM Aluminum Morning Meeting Minutes: U.S. and Mexico Suspend Sanctions Against China, Multiple Positive Factors Support Short-Term Strength in Aluminum Prices] Overall, positive signals from a macro perspective have strengthened market optimism regarding aluminum fundamentals. Expectations for improved domestic and external demand jointly drive short- to medium-term price rises. However, the emergence of off-season demand characteristics and marginal inventory accumulation will limit upside room for aluminum prices. In the short term, aluminum prices are expected to continue fluctuating at highs.

[SMM Aluminum Morning Meeting Minutes: U.S. and Mexico Temporarily Suspend Sanctions Against China, Multiple Positive Factors Support Short-Term Strength in Aluminum Prices] Positive signals from a macro perspective have strengthened market optimism regarding the fundamentals of the aluminum market. Expectations for improved domestic and international demand jointly drive the short- to medium-term rise in aluminum prices. However, the emergence of off-season demand characteristics and marginal inventory accumulation will limit the upside room for aluminum prices. In the short term, aluminum prices are expected to continue fluctuating at highs.

[SMM Aluminum Morning Meeting Minutes: Easing of China-U.S. Trade Frictions and Short-Term Macro Tailwinds Alleviate Downward Pressure] From a technical perspective, SHFE aluminum 2601 prices at night session closed at 21,675 yuan/mt. The MA5 (21,675) and MA60 (21,674) are close to the current price, but the MA10 (21,677) and MA20 (21,677.33) are slightly higher, forming short-term resistance. The MACD indicator is negative (DIF: -0.0843, DEA: 0.4607, MACD: -1.0900), indicating strengthening bearish momentum. The trading volume was 64,880 lots, with a daily increase in open interest of -2,613 lots, accompanying a slight drop in prices, suggesting weak and generally low market participation. Referencing recent highs and lows (night session high: 21,740, low: 21,655) and the previous settlement price of 21,650, the short-term resistance range is viewed at 21,720-21,740, while the support range is seen at 21,650-21,670. The overall trend is bearish, and it is necessary to monitor whether the support level can hold to avoid further declines.

[SMM Aluminum Morning Meeting Minutes: Policies to Boost Domestic Demand Continue to Take Effect, Optimistic Sentiment Drives Aluminum Prices to Fluctuate at Highs] Based on the SHFE aluminum 2601 contract, technical indicators from Friday's night session showed: the price closed at 21,555 yuan/mt, down 0.46%, below all key moving averages (MA5=21,557, MA10=21,558.5, MA30=21,558.33, MA60=21,558.5), indicating a short-term bearish trend; in the MACD indicator, the DIF was -0.4165, the DEA was 0.0742, and the MACD histogram was -0.9815, confirming increased bearish momentum; trading volume was 86,468 lots, with a daily increase in open interest of -6,648 lots, showing increased volume on a decline and significant selling pressure. Referring to recent highs and lows (high of 21,710, low of 21,535), the short-term resistance is expected near the MA5 around the 21,557-21,580 range, with support at 21,535; if broken, it may fall further to 21,300-21,400. Overall, the technical picture is weak, and it is advisable to monitor the effectiveness of the 21,535 support level; a rebound would need to break above 21,600 to alleviate downward pressure.

In the spot market this week (November 3-7, 2025), refined lead supply gradually recovered, but price quotes varied significantly across regions. In Henan and other areas, transportation was temporarily restricted due to smog. At the beginning of the week, suppliers in Henan quoted a premium of 50 yuan/mt against the SMM #1 lead or a discount of 120 yuan/mt against the SHFE lead 2512 contract. By the end of the week, the discount widened to 150-170 yuan/mt against the SHFE lead 2512 contract, with some small plants selling lead ingots at a slight discount to the SMM #1 lead average price. In Hunan, inventories at several smelters were sold out, and amid tight spot supply, suppliers switched to quoting a premium of 50-75 yuan/mt against the SMM #1 lead. For secondary refined lead, as supply recovered, market transactions improved slightly. The mainstream spot order discount remained at 50-0 yuan/mt against the SMM #1 lead average price. Downstream battery makers mainly picked up goods under long-term contracts, with a small amount of stockpiling at low prices.

[SMM Aluminum Price Weekly Review: Strong Macro Sentiment at Home and Abroad, Aluminum Prices Continue to Fluctuate at Highs]