Next week, key economic data includes the US December retail sales month-on-month rate, US January unemployment rate, US January seasonally adjusted non-farm payrolls, and CPI and PPI data from both China and the US. After a three-day partial government shutdown in early February due to funding problems, the US House of Representatives passed a government funding bill on the 3rd, resolving the impasse. Delayed data releases are scheduled for next week.
On the LME lead front, precious and non-ferrous metals continued their decline from the previous week. Overseas lead inventory surged by nearly 30,000 mt, pushing LME lead prices lower, with the LME Cash-3M contango widening to -$51.98/mt at one point. Additionally, the US dollar index fluctuated with a rebound, putting pressure on non-ferrous metals, and recurring overseas geopolitical issues are expected to keep LME lead in the doldrums next week, trading between $1,925-2,000/mt.
For SHFE lead, next week marks the final week before the Chinese New Year holiday. Both supply and demand in the lead market are declining, compounded by logistics suspensions and factory holidays, leading to sluggish market transactions. While smelters are clearing inventory, lead ingot stocks are being transferred to downstream enterprises and social warehouses. There is a risk of further increases in social warehouse inventory, which may weigh on lead prices, keeping them in the doldrums. The most-traded SHFE lead contract is expected to trade between 16,350-16,850 yuan/mt next week.
Spot price forecast: 16,350-16,600 yuan/mt. Next week, the last batch of lead-acid battery enterprises will enter holiday mode, leading to a further decline in lead consumption and increasingly sluggish spot transactions. Meanwhile, maintenance or production cuts at secondary and primary lead smelters are increasing. With most enterprises having already cleared inventory ahead of the holiday, pre-holiday inventory buildup pressure at smelters is relatively small. Spot discounts are unlikely to widen and may narrow slightly. Lead ingot inventory accumulation will be more evident during the Chinese New Year holiday period.
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