Lead Prices Continue to Fluctuate Downward as Downstream Remains Cautious [SMM Lead Morning Meeting Summary]

Futures Market:

Overnight, LME lead opened at $1,995/mt, fluctuated downward during the Asian session, and continued to decline during the European session, hitting a low of $1,972.5/mt before rebounding to a high of $1,999/mt. It eventually closed at $1,992.5/mt, down $4/mt or 0.2%.
Overnight, the most-traded SHFE lead 2503 contract opened at 16,965 yuan/mt, fluctuated upward to 17,000 yuan/mt during the early session and consolidated, eventually closing at 17,025 yuan/mt, down 10 yuan/mt or 0.06%.
Macro Side: Overnight, the US dollar index rose by 0.14% due to the US issuing a new round of tariff threats and controversial negotiations to end the Russia-Ukraine conflict, which heightened market tensions. A stronger US dollar suppressed precious metal prices and LME base metals. Meanwhile, China's State Administration for Market Regulation and four other departments issued the "Three-Year Action Plan for Optimizing the Consumption Environment (2025–2027)" to create new-type consumption scenarios.

» Click to view SMM lead spot historical prices

Macro Side: Overnight, the US dollar index rose by 0.14% due to the US issuing a new round of tariff threats and controversial negotiations to end the Russia-Ukraine conflict, which heightened market tensions. A stronger US dollar suppressed precious metal prices and LME base metals. Meanwhile, China's State Administration for Market Regulation and four other departments issued the "Three-Year Action Plan for Optimizing the Consumption Environment (2025–2027)" to create new-type consumption scenarios.

Spot Market Fundamentals:
In the Shanghai market, Honglu lead was quoted on par with the SHFE lead 2503 contract; in Jiangsu and Zhejiang regions, JCC and Jijin lead were quoted at discounts of 20–0 yuan/mt against the SHFE lead 2503 contract. SHFE lead maintained a consolidating trend in the morning but sharply declined at the end of the first trading session, breaking below the 17,000 yuan/mt mark. This intensified the wait-and-see sentiment among upstream and downstream enterprises, with suppliers keeping premiums and discounts unchanged. Ex-factory quotations for smelters' self-picked cargoes also showed little change, with a few even further lowering prices. Meanwhile, secondary lead producers, due to cost factors, showed increased reluctance to sell at low prices. Secondary refined lead was quoted at discounts of 50–0 yuan/mt against the SMM 1# lead average price on an ex-factory basis. On the downstream side, battery manufacturers remained cautious, with some probing inquiries but more inclined towards risk aversion. Only a few transactions were concluded based on rigid demand.
Inventory: As of February 19, LME lead inventory decreased by 950 mt to 219,825 mt. According to SMM, as of February 17, the total social inventory of lead ingots across five major regions in China reached 53,400 mt, an increase of 7,200 mt compared to February 10 and an increase of 1,100 mt compared to February 13.

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Lead Price Forecast for Today:

In the spot market, downstream rigid demand recovered slowly, and refined lead supply remained relatively abundant. Early-week inventory accumulation temporarily weighed on lead prices. However, as lead prices weakened, scrap battery prices remained firm, narrowing secondary refined lead profits, with some regions even seeing inverted quotations for primary lead. In Hunan, some smelters resumed production but primarily focused on shipments under long-term contracts. In Henan and Hunan, traders' ex-factory cargoes continued to be sold at discounts. Lead prices are expected to fluctuate downward in the short term, with further attention needed on the pace of downstream production recovery and buying the dip sentiment.