Mixed Macro News; Lead Prices Continued to Consolidate [SMM Lead Morning Meeting Minutes]

Futures:

Overnight, LME lead opened at $1,960.5/mt. Under the continued impact of bearish macro factors, LME lead fluctuated downward throughout the day, giving back the previous day’s gains. Overall, it remained in a rangebound pattern, trading mostly at $1,938–1,948/mt in the latter half of the session, and finally closed at $1,943.5/mt, down 0.94%.

Overnight, the most-traded SHFE lead 2604 contract opened at 16,775 yuan/mt. After the open, SHFE lead was in the doldrums and gradually moved to around 16,700 yuan/mt. In the latter half of the session, bulls and bears were locked in a stalemate. SHFE lead finally closed at 16,715 yuan/mt, down 0.62%; its open interest fell to 59,341 lots, down 24 lots from the previous trading day.

On the macro front:

Premier Li Qiang delivered the Government Work Report: China’s 2026 economic growth target was 4.5%–5%, with a deficit-to-GDP ratio of around 4%. Iran refuted claims about blocking the Strait of Hormuz, prepared to respond to US ground operations, and refused to negotiate with the US. Lloyd’s: insurers were still quoting for navigation through the Strait of Hormuz and were communicating with DFC on trade insurance solutions. France, Italy, and Greece joined forces to coordinate military deployments to safeguard freedom of navigation in the Red Sea. Asian fuel supply fell into tightness. A surge in oil prices hit expectations for interest rate cuts, and US Treasury traders’ expectations that the US Fed would not cut rates this year intensified.

:

In yesterday’s lead spot market, SHFE lead maintained a consolidating trend. Suppliers made shipments in line with the market, and premiums were basically stable. Among them, primary lead smelters’ cargoes self-picked up from production site were quoted at discounts of 25 yuan/mt to premiums of 25 yuan/mt against the SMM #1 lead average price ex-works. In addition, 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. Downstream enterprises mostly stayed on the sidelines, while some restocked on rigid demand; however, they bargained more with sellers, leaving transactions in a stalemate. Overall trading in the spot market was sluggish.

Inventory: As of March 5, LME lead inventory decreased by 200 mt from the previous day to 285,900 mt; SHFE lead ingot warrant inventory was unchanged for two consecutive days at 54,888 mt; this week, SMM five-region social inventory of lead ingots edged up again and remained at a five-month high.

Lead Price Forecast for Today:

At present, the impact of the Chinese New Year holiday on the domestic market had basically dissipated. Apart from maintenance at some lead smelters that had yet to resume, other upstream and downstream enterprises had basically returned to normal production and trading. However, activity in the lead spot market showed mediocre performance, lead ingot inventory drew down slowly, and while primary lead and secondary lead smelters’ in-plant inventory declined, social warehouses remained elevated. Recently, a large secondary lead enterprise in Anhui entered maintenance, leading to a regional tightening of supply, which may ease subsequent inventory pressure for lead ingots. It is also worth noting that next week is the week before delivery for the SHFE lead 2603 contract. During this period, suppliers may shift inventories and ship to delivery warehouses, with in-factory inventory of lead ingots converting into visible inventory, and lead prices are expected to continue a fluctuating trend in the doldrums.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information and market communication, relying on SMM’s internal database models, and are for reference only and do not constitute decision-making advice.