Market Activity Extremely Low, Lead Prices Maintain Fluctuating Trend [SMM Lead Morning Meeting Summary]

Futures Market:

Last Friday, LME lead opened at $1,953/mt, fluctuated upward during the Asian session, peaked at $1,970/mt during the European session before plunging, and dipped to $1,935.5/mt by the end of the session, closing at $1,937/mt, down 0.62%. On Friday night, the most-traded SHFE lead 2503 contract opened lower with a gap at 16,720 yuan/mt, briefly touched a high of 16,730 yuan/mt at the beginning of the session, then plunged to 16,635 yuan/mt, slightly rebounded, and fluctuated around the intraday moving average, closing at 16,690 yuan/mt, down 0.51%.

》Click to view SMM lead spot historical prices

Macro:

According to foreign media reports, Colombian President Gustavo Petro threatened to impose a 50% tariff on goods from the US after former President Trump took retaliatory measures, including tariffs and sanctions, against Colombia for refusing to accept deportation flights. The PBOC conducted a 200 billion yuan 1-year MLF operation. The PBOC stated that the weighted average interest rate of newly issued commercial personal housing loans nationwide in Q4 2024 was 3.10%. The Ministry of Finance of China reported that stamp duty revenue in 2024 was 342.7 billion yuan, down 9.5% from the previous year.

Spot Market Fundamentals: As the Chinese New Year holiday approaches, logistics vehicles have further decreased, nearing a complete halt, and suppliers in the Jiangsu, Zhejiang, and Shanghai markets have rarely quoted prices. On Friday morning, SHFE lead fluctuated upward, with some suppliers making final deliveries, including purchases from downstream enterprises over the previous two days and some transfers to delivery warehouses. Quotes in the secondary lead market were also scarce, with a few suppliers quoting a premium of 50 yuan/mt ex-factory against the SMM 1# lead average price, while most enterprises neither shipped nor quoted. By Friday, downstream enterprises had largely stopped inquiries, and the spot market showed a state of nominal prices without transactions. Inventory: On January 24, LME lead inventory decreased by 2,025 mt to 225,475 mt, down 0.89%. As of January 23, the total social inventory of SMM lead ingots in five regions stood at 39,100 mt, down 7,600 mt from January 16 and 6,800 mt from January 20.

》Click to view the SMM metal industry chain database

Lead Price Forecast Today:

Pre-holiday downstream enterprises are stocking up as needed but remain cautious about the post-holiday market, resulting in pre-holiday stocking volumes being primarily demand-driven. With more downstream enterprises going on holiday, lead consumption is further declining. Meanwhile, during the Chinese New Year, the production of primary and secondary lead enterprises is expected to exceed that of downstream enterprises, leading to a high risk of inventory buildup for lead ingots after the holiday. Additionally, attention should be paid to potential disruptions in overseas markets during the holiday period.