Fundamentals Remain Weak, Lead Prices in the Doldrums [SMM Lead Morning Briefing]

SMM February 13:

Overnight, LME lead opened at $1,996.5/mt, reached a high of $1,998.5/mt during the Asian session before declining; it initially rose then fell during the European session, plunged to a low of $1,970/mt towards the close, and finally settled at $1,984/mt, down 0.53%.

Overnight, the most-traded SHFE lead 2604 contract opened at 16,700 yuan/mt, fluctuated upward to a high of 16,765 yuan/mt in early trading before weakening, touched a low of 16,670 yuan/mt towards the close, and finally settled at 16,705 yuan/mt, up 0.03%.

This week was the last week before the Chinese New Year, as upstream and downstream enterprises in the lead industry chain successively entered holiday mode. Coupled with the start of the Chinese New Year holiday, which prompted migrant workers to return home and reduced vehicle transportation, trading in the spot lead market also entered a stagnant period. More suppliers transferred lead ingots from smelter plant inventories to social warehouses, and social inventory of lead ingots continued to increase. Additionally, during the Chinese New Year, lead-acid battery enterprises concentrated on holidays, while some medium and large primary lead and secondary lead enterprises maintained shift work. The supply-demand mismatch for lead ingots, along with the delivery factor of the SHFE lead 2602 contract after the holiday, is expected to result in a further increase in social inventory of lead ingots after the holiday, and lead prices are anticipated to fluctuate in the doldrums.

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