Overnight, the most-traded SHFE lead 2504 contract opened at a high of 17,180 yuan/mt. Due to long liquidation, it fluctuated downward, hitting a low of 17,085 yuan/mt at the end of the session and closing at 17,095 yuan/mt, down 0.09%.
Following the completion of the delivery of the SHFE lead 2502 contract last week, the production of primary and secondary lead smelters further recovered (including those affected by the Chinese New Year break, equipment maintenance, and the commissioning of new capacity). The lead spot market supply remained relatively ample. During this period, the price spread between futures and spot prices in major production areas was significant. Primary lead quotations against the SHFE lead 2503 contract were generally at discounts of over 240 yuan/mt ex-factory. Suppliers showed increased reluctance to sell discounted cargoes, shifting from selling to transferring to delivery warehouses. In Henan, there were already instances of queuing for cargo pick-up and delivery warehouse transfers. Recently, lead ingots have been moving from in-plant inventory to social warehouses, and this "inventory transfer" is expected to continue in the short term, with lead ingot stocks in social warehouses likely to keep increasing. Overall, lead prices are expected to maintain a fluctuating trend in the short term.
