Lead ingot inventory remains high after the holiday, next week's consumption recovery progress needs attention [SMM lead market weekly forecast]

         Next week, key macroeconomic data releases include the US February ISM Manufacturing PMI, US February ADP employment figures, and China's official February Manufacturing PMI; additionally, the US Fed will release the Beige Book. Meanwhile, overseas geopolitical tensions remain prominent, with uncertainties in US-Iran conflicts fueling strong market risk-off sentiment.

On the LME lead front, overseas lead inventory surged by over 50,000 mt during the Chinese New Year holiday. Although stocks declined post-holiday, the high inventory base continued to significantly suppress lead prices, preventing them from breaking above $2,000/mt. Recently, widespread power outages in the US due to winter storms boosted heating demand, driving natural gas prices higher. This, to some extent, increased smelting costs for lead ore and lead ingots, providing short-term support for lead prices. LME lead is expected to trade between $1,950-2,000/mt next week.

For SHFE lead, post-holiday inventory buildup in the lead market was severe, with stocks rising simultaneously at smelters and social warehouses, becoming a major drag on prices. Notably, scrap battery prices rose steadily after the holiday, widening losses for secondary lead producers and prompting some smelters to delay resumption plans, which will ease future lead ingot inventory pressure. Meanwhile, as downstream enterprises resume operations, focus will be on lead consumption recovery digesting lead inventories. The most-traded SHFE lead contract is forecast to fluctuate between 16,650-17,000 yuan/mt next week.

Spot price forecast: 16,500-17,500 yuan/mt. Next week, lead-acid battery enterprises are expected to largely resume production, and with pre-holiday lead ingot inventories gradually being consumed, rigid demand restocking is anticipated. On the supply side, secondary lead smelters delayed resumption and face significant losses, limiting spot discounts for secondary refined lead. For primary lead, supplies will re-enter the market after delivery next week, and with high smelter inventories, spot discounts may widen.