Futures:
Overnight, LME lead opened at $1,969/mt. Market trading was sluggish, and the price consolidated throughout the day, with the decline slowing compared to the previous day. It mostly fluctuated between $1,960-1,980/mt, eventually closing at $1,961.5/mt, down 0.46%, marking the sixth consecutive negative session.
Overnight, the most-traded SHFE lead 2603 contract opened at 16,640 yuan/mt. With losses in secondary lead and weak consumption coexisting, a stalemate between longs and shorts emerged during the session. SHFE lead traded in a narrow range, mostly fluctuating between 16,600-16,650 yuan/mt, until it finally closed at 16,615 yuan/mt, down 0.15%. Open interest increased by 2,252 lots to 57,001 lots compared to the previous trading day.
On the macro front:
The Central Committee of the Communist Party of China and the State Council issued opinions on anchoring agricultural and rural modernization and solidly advancing the comprehensive revitalization of rural areas. The US House of Representatives passed a funding agreement negotiated by President Trump and Senate Democrats, potentially ending the partial US government shutdown. Additionally, the China Nonferrous Metals Industry Association (CNIA) is researching the inclusion of "copper concentrates" into national reserves.
:
In the lead spot market yesterday, lead prices continued to be in the doldrums. Suppliers sold goods following the market trend. Warrant quotations remained firm, while quotations for primary lead ingot cargoes self-picked up from production sites showed divergence. Some smelters in south China implemented production cuts, shifting their quotations to premiums. In contrast, supplies in more northern regions were ample, with quotations remaining at discounts. Main producing area quotations against the SMM #1 lead average price were at discounts of 50 yuan/mt to premiums of 50 yuan/mt ex-works. In the secondary lead sector, losses widened, leading to a noticeable reduction in smelter quotations. Some secondary refined lead quotations against the SMM #1 lead average price were at discounts of 50 yuan/mt to premiums of 50 yuan/mt ex-works, resulting in an inverted price spread between primary lead and secondary lead. Downstream enterprises only made just-in-time procurement, with few inquiries. Some traders showed interest in acquiring heavily discounted cargoes. Trading in the spot market was sluggish.
Inventory: As of February 3, LME lead inventory surged by 28,775 mt to 232,850 mt. SMM lead ingot social inventory across five regions continued its upward trend, reaching a two-month high.
Today's lead price forecast:
Recently, the Chinese New Year atmosphere in the lead market has intensified. Downstream lead-acid battery enterprises are gradually preparing for work stoppages and holidays, leading to a decline in trading activity in the lead market and weighing on prices, which are expected to continue their fluctuating trend. However, it is noteworthy that after the price decline, raw material prices such as scrap batteries remain high. Losses for secondary lead enterprises have widened, with some smelters having already cut production or halted operations for the holidays, leading to a relative tightening of supply. Operating enterprises narrowed the discounts on their secondary lead quotations. In some regions, secondary refined lead prices inverted against primary lead prices, which may provide some support for lead prices. In the short term, both lead supply and demand are declining, and lead prices will maintain a weak consolidation trend.
Data Source Statement: Except for publicly available information, other data are processed by SMM based on public information, market communication, and the SMM internal database model, for reference only and do not constitute decision-making advice.
