Next week, macro economic data mainly include the US July core PCE price index year-on-year, the US Q2 real GDP annualized quarterly rate revision, and the US 2026 non-farm employment base change preliminary value, etc. According to interest rate market data, investors currently expect a probability of around 64% that the US Fed will keep rates unchanged in September and a probability of around 36% of a rate hike. Although a September rate hike by the US Fed is still possible, market rate hike expectations have cooled compared with earlier periods, somewhat weakening the US dollar interest rate advantage.
Regarding LME lead, LME lead inventory ended its four-week downtrend this week, with a single-day inventory growth of nearly 10kt mid-week. Meanwhile, LME lead Cash-3M contango further widened, once reported at -$48.87/mt, hitting a nearly five-month low, indicating that spot market demand outside China remains weak. The current situation in the Middle East still has significant uncertainty, and shipping costs also impose certain constraints on global trade flows. In the short term, fundamentals offer no support to lead prices. Subsequent lead price movements will trade time for space, maintaining a box consolidation pattern in the short term. Next week, LME lead will trade in a range from $1,865 to $1,915/mt.
Regarding SHFE lead, maintenance at delivery brand enterprises and cargo pick-up by downstream enterprises will further promote lead ingot inventory destocking, providing some support to lead prices. SHFE lead is expected to continue consolidating on a strong note. However, it is worth noting that the lead ingot import window has reopened, and spot cargo import lead quotations have increased, to some extent offsetting the supply reduction caused by maintenance at domestic smelters. Subsequently, attention should be paid to the impact of further opening of the import window and increased import supply on domestic lead prices, and be wary of the risk of a pullback after lead prices shot up. Next week, SHFE lead is expected to trade in a range from 15,800 to 16,200 yuan/mt.
Spot lead price forecast: 15,650-15,950 yuan/mt. On lead consumption, as the traditional peak season approaches, production enthusiasm of downstream enterprises has relatively improved, and lead consumption expectations are steady with some growth. However, the rapid rise in lead prices will dampen downstream purchasing enthusiasm, and the inflow of import lead and production resumptions of secondary lead enterprises will also give downstream more procurement options. For primary lead, the expanding impact of maintenance at delivery brand enterprises is the main factor for short-term spot premiums trading. It is necessary to be wary of the offsetting effect of increased supply from other sources on supply tightening, and spot premiums trading may be difficult to sustain in the long term.
![July imports of lead alloy showed strong resilience, while the import scale of other lead materials sharply contracted [SMM Analysis]](https://imgqn.smm.cn/usercenter/yqTpQ20251217171721.jpeg)
