Refined Lead Inventory Continued to Accumulate, and Upward Momentum in Lead Prices Was Slightly Insufficient [SMM Lead Morning Meeting Minutes]

Futures:

Last Friday, LME lead opened at $1,945/mt and fluctuated upward during the Asian session. Entering the European session, it continued to rise and touched a high of $1,955/mt before weakening and dipping to $1,937/mt. Before the close, it recovered part of the losses and finally closed at $1,946/mt, up $2.5/mt, a gain of 0.13%. Overnight, the most-traded SHFE lead contract opened at 16,780 yuan/mt. It rose early to a high of 16,815 yuan/mt, then moved lower and weakened. After touching 16,730 yuan/mt at the low, it rebounded to hover and consolidate near the intraday moving average, and finally closed at 16,765 yuan/mt, up 0 yuan/mt from the previous day’s settlement price, with a % change of 0%.

On the macro front: US nonfarm payrolls in February unexpectedly fell by 92,000, marking the first single-month negative growth since 2020. After the data release, traders increased their bets on US Fed interest rate cuts in 2026. Analysts believed that a weakening labour market, coupled with escalating tensions in the Middle East pushing up oil prices, intensified market concerns over stagflation risks. Zheng Shanjie, Director of the National Development and Reform Commission (NDRC), said at an economy-themed press conference that this year’s GDP increment was expected to exceed 6 trillion yuan, equivalent to the annual total of a developed economy, which would provide strong support for stabilising employment, improving people’s livelihoods, and preventing risks. On investment, 109 major projects under the 15th Five-Year Plan will be advanced this year, focusing on building the “six networks” such as water networks, power grids, and computing power networks, as well as facilities for the low-altitude economy and artificial intelligence. The related investment scale this year was expected to exceed 7 trillion yuan.

Spot fundamentals:

In the Shanghai market, Chihong lead was quoted at discounts of 100-0 yuan/mt against the SHFE lead 2604 contract. SHFE lead remained in the doldrums, and suppliers mostly made shipments at discounts, especially for cargoes self-picked up from production site from primary lead smelters, which were quoted at relatively larger discounts. Mainstream producing areas were quoted at discounts of 50 yuan/mt to premiums of 25 yuan/mt against the SMM #1 lead average price, ex-works. Secondary lead smelters held prices firm for shipments, with secondary refined lead quoted at discounts of 50 yuan/mt to premiums of 25 yuan/mt against the SMM #1 lead average price, ex-works, leaving no price spread versus primary lead. In addition, with some imported lead entering the domestic market, downstream enterprises had more procurement options, and transactions in the spot order market remained sluggish.

Inventory: As of March 6, LME lead inventory stood at 285,900 mt, unchanged from the previous day; last Thursday, SMM five-region social inventory of lead ingots edged up again and remained at a five-month high.

Lead price forecast for today:

In March, both supply and demand for domestic lead ingots increased. With imported lead supplementing supply and downstream pre-holiday inventories being digested slowly, lead prices lacked upward momentum. The secondary lead segment was currently in a loss-making state, reducing smelters’ willingness to resume production. Some enterprises delayed their production resumptions to mid-to-late March, briefly providing supportive conditions for lead price performance. This week was also the week before delivery for the SHFE lead 2603 contract. In the spot market in Henan and Hunan, deals for premiums over the SMM #1 lead average price were slightly difficult to conclude. Suppliers and smelters were expected to continue transferring inventory and shipping to delivery warehouses, and expectations of a continued build in visible inventory were still set to keep lead prices under pressure.