US Dollar Falls Back from Highs, Broad Base Metals Rally, Lead Prices Fluctuate Upward [SMM Lead Morning Meeting Summary]

Futures Market:

Overnight, LME lead opened at $1,967.5/mt, edged down slightly during the Asian session, then strengthened significantly during the European session amid a broad rally in base metals, reaching a high of $1,995.5/mt before pulling back. It finally closed at $1,972/mt, up $6.5/mt or 0.33%.

Overnight, the most-traded SHFE lead 2503 contract opened at 16,785 yuan/mt, rose to a high of 16,875 yuan/mt in early trading before retreating to near the intraday moving average, and eventually closed at 16,825 yuan/mt, up 90 yuan/mt or 0.54%.

》Click to View SMM Lead Spot Historical Prices

Macro: At noon on January 20, US Eastern Time, Donald Trump was sworn in as the 47th President of the United States in the Rotunda of the Capitol in Washington and delivered his inaugural address. Market traders' concerns over US import tariffs eased as they digested expectations of a series of new economic policies from the US. The US dollar pulled back from its more than two-year peak. Additionally, the LME allowed the delivery of seven metals, including copper, aluminum, lead, zinc, tin, and nickel, in Hong Kong, with operations expected to begin three months after the first warehouse company is approved. Domestically, expectations of positive Chinese economic data continued to ferment, creating a warm macro atmosphere ahead of the holiday.

Spot Market Fundamentals:

Quotations in the Shanghai market were scarce; in Jiangsu and Zhejiang regions, JCC lead was quoted at 16,745-16,805 yuan/mt, with premiums of 40-80 yuan/mt against the SHFE 2502 contract. SHFE lead fluctuated upward, and suppliers had limited cargoes, with significantly fewer quotations compared to last week. During this period, some primary lead cargoes self-picked up from production sites were quoted in line with market trends, with premiums adjusted downward. Some secondary lead enterprises followed downstream holiday schedules, resulting in reduced quotations for secondary refined lead. Mainstream secondary refined lead quotations were at premiums of 0-50 yuan/mt against the SMM 1# lead average price ex-factory. Downstream enterprises had either gone on holiday or completed pre-holiday stockpiling, leading to sparse inquiries and sluggish spot order transactions. Mainstream secondary refined lead quotations were at premiums of 0-75 yuan/mt against the SMM 1# lead average price ex-factory, with suppliers adjusting prices according to market conditions. Most downstream battery producers had completed stockpiling, and secondary lead transactions were sporadic.

On January 20, LME lead inventory continued its downward trend, with a destocking of 1,725 mt to 234,375 mt, with the decline still originating from Singapore warehouses. According to SMM, as of January 20, the total social inventory of SMM lead ingots in five regions stood at 45,900 mt, down 1,700 mt from January 13 and approximately 800 mt from January 16.

》Click to View SMM Metal Industry Chain Database

Lead Price Forecast for Today:

In the final week before the Chinese New Year, logistics and transportation in some regions have already stopped or increased shipping costs. The lead spot market is entering a countdown phase, with the vast majority of downstream enterprises having completed pre-holiday stockpiling, and only a few continuing to make low-price purchases as needed. Regarding downstream production halts and holidays, some lead-acid battery enterprises in Zhejiang, Guangdong, and Jiangsu regions began suspending operations last weekend, with most lead-acid battery producers expected to gradually enter holiday mode around the Chinese New Year. Suppliers are conducting final clearance sales, with premiums for refined lead quotations adjusted downward in some regions, and lead ingot social warehouse inventory continuing to decline. It is expected that the holiday atmosphere will gradually intensify, further weakening lead ingot market transactions, and lead prices will continue to fluctuate rangebound.