Slow Social Inventory Drawdown; Lead Prices Remained in the Doldrums [SMM Lead Morning Meeting Minutes]

Futures:

Overnight, LME lead opened at $1,940/mt and stayed relatively strong during the Asian session, hitting a high of $1,942/mt. Entering the European session, it pulled back to hover near the intraday moving average before sliding to an intraday low of $1,927.5/mt. It edged up slightly before the close and finally settled at $1,931/mt, down $15/mt, or 0.77%.

Overnight, the most-traded SHFE lead 2604 contract opened at 16,710 yuan/mt. After rising early to a high of 16,750 yuan/mt, it turned lower and weakened, staying under pressure around 16,700 yuan/mt and moving sideways. It rose slightly late in the session and finally closed at 16,720 yuan/mt, down 35 yuan/mt from yesterday, or 0.21%.

On the macro front: US President Trump said at a press conference that the US military action against Iran would end “soon,” but “not” within this week. To address market turbulence caused by the military action and to stabilise international oil prices, Trump announced the cancellation of some oil-related sanctions. National Bureau of Statistics (NBS): In February 2026, the national CPI rose 1.3% YoY. On average in January–February, the national CPI increased 0.8% from the same period a year earlier. The work report of the Standing Committee of the National People’s Congress in 2026 disclosed this year’s legislative “construction blueprint”. Centered on accelerating the building of a strong financial country, China will formulate the Financial Law and the Financial Stability Law this year, and revise the Law of the People’s Bank of China and the Law on Banking Supervision and Administration, to build the top-level design of financial rule of law.

Spot fundamentals:

In the Shanghai market, Chihong lead was quoted at discounts of -100~0 yuan/mt against the SHFE lead 2604 contract. After SHFE lead probed lower and then rebounded, suppliers quoted in line with the market. As delivery approaches, circulating cargoes increased in Jiangsu, Zhejiang, Shanghai. In addition, cargoes self-picked up from production site at primary lead smelters were mostly shipped at discounts, while some suppliers showed significant divergence in shipments. Mainstream producing areas offered ex-works quotations at discounts of 50 yuan/mt to premiums of 100 yuan/mt against the SMM #1 lead average price. Circulating cargoes in the secondary lead market were limited, and smelters held prices firm for shipments. Secondary refined lead was quoted ex-works at discounts of 50 yuan/mt to premiums of 25 yuan/mt against the SMM #1 lead average price. Meanwhile, quotations for imported crude lead increased. Downstream enterprises showed strong wait-and-see sentiment, with relatively scattered procurement, and spot order market transactions showed no obvious improvement for now.

Inventory: As of March 6, LME lead inventory stood at 283,875 mt, down 1,025 mt from the previous day; as of March 9, SMM social inventory of lead ingots across five regions continued to rise.

Lead price forecast for today:

After the Chinese New Year holiday factor faded, both supply and demand for lead ingots increased, but even if secondary lead enterprises delayed resuming operations, lead ingot inventories at smelters were still being digested slowly. With delivery of the SHFE lead 2603 contract approaching, and considering that the spread between futures and spot prices has recently stayed above 200 yuan/mt, suppliers in the spot market showed strong willingness to transfer inventory and ship to delivery warehouse, gradually moving smelter plant inventories to delivery warehouses. Social inventory of lead ingots is expected to continue rising in the short term, and lead price expectations are expected to remain in the doldrums.