Chinese New Year Holiday Approaching: Lead Market Supply and Demand Both Decline [SMM Lead Morning Meeting Summary]

Futures Market:

Overnight, LME lead opened at $1,969/mt, fluctuated around the daily moving average during the Asian session, and touched a low of $1,959/mt in the European session before fluctuating upward to a high of $1,985/mt. It eventually closed at $1,964/mt, down $5/mt or 0.25%.
Overnight, the most-traded SHFE lead 2503 contract opened at 16,855 yuan/mt, fluctuated downward after the opening, briefly touching a low of 16,725 yuan/mt, and finally closed at 16,755 yuan/mt, up 50 yuan/mt or 0.3%.

》Click to view SMM lead spot historical prices

Macro: The uncertainty surrounding US tariff prospects continued to affect market sentiment. Domestically, six departments, including the Central Financial Office, issued the "Implementation Plan for Promoting Medium and Long-Term Funds into the Market." A press conference was held at 9:00 AM on January 23, 2025, to introduce efforts to promote medium and long-term funds into the market and facilitate high-quality development of the capital market.

Spot Fundamentals:

Quotations in the Shanghai market were scarce. In Jiangsu and Zhejiang regions, Tongguan and JCC lead were quoted at premiums of 0-50 yuan/mt against the SHFE lead 2502 contract. SHFE lead showed a trend of opening low and moving higher, while the domestic market was increasingly influenced by the Chinese New Year atmosphere. Some suppliers had already started their holidays, and the remaining ones were also in a holiday-waiting mode, with few spot order quotations. Meanwhile, smelters sold cargoes self-picked up from production sites at prevailing prices, with a few offering discounts (against the SMM 1# lead average price). However, most downstream enterprises had already started their holidays, with only a few conducting final stockpiling. Market trading was sluggish on both supply and demand sides. Today, the SMM 1# lead average price dropped by 75 yuan/mt from yesterday to 16,625 yuan/mt. In the spot market, supply and demand were both sluggish. Some suppliers still showed a willingness to sell, with mainstream secondary refined lead quoted at discounts of 75-0 yuan/mt against the SMM 1# lead average price on an ex-factory basis. Downstream battery producers had mostly completed stockpiling, and secondary lead transactions were sluggish.

》Click to view the SMM metal industry chain database

Lead Price Forecast Today:

As the Chinese New Year holiday approaches, major lead-acid battery enterprises have entered the holiday period, with raw material procurement and battery shipments gradually coming to an end. In terms of supply, some small and medium-sized primary lead smelters in Henan and Hunan, as well as most secondary refined lead smelters, have started their routine holiday maintenance. The refined lead market is experiencing a simultaneous decline in supply and demand, and trading in the lead spot market continues to weaken. Attention should be paid to smelters' pre-holiday inventory presales and the expected inventory buildup during the holiday.