Post-holiday lead market supply-demand not fully recovered, lead prices continue to move sideways [SMM Lead Morning Meeting Minutes]

Futures:

Overnight, LME lead opened at $1,987.5/mt, hovering around the daily moving average during the Asian session. Entering the European session, it rose to a high of $1,994.5/mt before weakening, touching a low of $1,972/mt before the close, and finally closed at $1,979/mt after a slight rebound, down $16.5/mt, a decrease of 0.83%. Overnight, the most-traded SHFE lead contract opened at 16,800 yuan/mt, fell to a low of 16,740 yuan/mt after opening, then rebounded to a high of 16,820 yuan/mt, and finally closed at 16,800 yuan/mt after brief consolidation, forming a doji, up 45 yuan/mt from the previous settlement price, an increase of 0.27%.

Data released by the State Administration for Market Regulation showed that 25.745 million new business entities were established nationwide in 2025, with rapid growth in enterprises related to emerging industries and future industries, indicating strong innovation momentum. Among them, frontier fields such as humanoid robots, civil aviation, and generative artificial intelligence led the gains. The number of Americans applying for unemployment benefits increased less than expected, indicating that layoffs remained at a low level. The third round of indirect talks between the US and Iran concluded, with the Iranian foreign minister stating that the two sides were close to reaching a consensus in some areas, and technical negotiations would be held in Vienna next Monday. The foreign minister of Oman, the mediating party, described the talks as having made significant progress. Media reports indicated that differences between the two sides remained significant, with the US insisting that Iran completely dismantle its nuclear facilities and transfer all enriched uranium out of the country; Iran proposed stopping nuclear activities for a limited number of years, after which enrichment activities would resume within a regulated regional framework.

Spot fundamentals:

In the Shanghai market, Chihong and Honglu lead was quoted at discounts of 50 yuan/mt to premiums of 50 yuan/mt against the SHFE lead 2604 contract. SHFE lead continued to hold up well. Some suppliers completed month-end inventory clearance, with individual large discount quotations narrowing, while other suppliers followed the market in shipments, mainly with cargoes self-picked up from primary lead smelters' production sites. Few secondary lead smelters had resumed production, with some having delayed plans; secondary refined lead quotations were scarce, and prices were firm, with mainstream producing areas offering at parity with the SMM #1 lead average price ex-works. Downstream enterprises resumed work gradually, but most still had certain inventory, resulting in low enthusiasm; spot order market transactions were sluggish.

Inventory: On February 26, LME lead inventory was 286,300 mt, flat from the previous trading day. As of February 26, the total social inventory of lead ingots in five regions tracked by SMM continued to accumulate.

Today's lead price forecast:

This week, spot order procurement demand from downstream enterprises remained primarily for small, rigid needs. Many downstream enterprises were still consuming lead ingots stockpiled before the holiday after resuming work, and post-holiday lead ingot consumption appeared slightly weak. On the refined lead supply side, large-scale primary lead smelters in Henan maintained stable supply during the holiday. Smelter inventories accumulated significantly after the holiday, while the pace of production resumptions for secondary lead smelting enterprises that halted during the Chinese New Year was noticeably delayed compared to previous years. Under the current scrap battery and lead price conditions, secondary lead enterprises remained in a loss-making state upon resuming work, and concentrated production resumptions are expected to be delayed until March. This week, the supply and demand in the spot refined lead market have not fully recovered. Lead prices have moderate support at lower levels but struggle to rise due to pressure from increasing domestic inventory. In the short term, lead prices are expected to continue moving sideways.