Pre-Holiday Routine Stockpiling Boosts Lead Ingot Transactions; Social Inventory May Continue to Decline [SMM Lead Morning Meeting Summary]

Futures Market:

Overnight, LME lead opened at $1,925/mt, briefly touching a low of $1,924/mt before fluctuating upward. During the European session, LME lead reached a high of $1,955.5/mt and finally closed at $1,947.5/mt, up 1.38%. Overnight, the most-traded SHFE lead 2502 contract opened higher with a gap at 16,795 yuan/mt, then fluctuated downward to a low of 16,705 yuan/mt. Supported by the rise in the US dollar, it rebounded and closed at 16,750 yuan/mt, up 0.09%.

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Spot Fundamentals :

Yesterday, in the Shanghai market, Chihong lead was quoted at 16,800-16,900 yuan/mt, with a premium of 80-100 yuan/mt against the SHFE lead 2502 contract. In Jiangsu and Zhejiang regions, JCC and Jinde lead were quoted at 16,770-16,880 yuan/mt, with a premium of 50-80 yuan/mt against the SHFE lead 2502 contract. SHFE lead showed a fluctuating upward trend, and suppliers sold goods accordingly. During this period, the haze restrictions in Henan were lifted, and vehicle transportation resumed normal operations. Quotes for cargoes self-picked up from production sites by smelters increased compared to last Friday. Meanwhile, secondary lead smelters stood firm on quotes, continuing to offer a premium of 50-100 yuan/mt ex-factory against the SMM 1# lead average price. Downstream enterprises gradually purchased as needed, and the spot order market saw slightly improved activity.

Inventory: According to the SMM survey, as of January 6, the total social inventory of lead ingots in five major regions tracked by SMM stood at 48,200 mt, down 4,900 mt from December 30 and 4,600 mt from January 2.

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Lead Price Forecast Today:

Macro side, Trump posted on social media that the report by The Washington Post regarding tariff policy reductions was false. The US Congress officially certified Trump as the elected president. The final value of the US December S&P Global Services PMI was 56.8, higher than the previous value of 58.5. China's National Financial Regulatory Administration issued the "Administrative Measures for Margin Management of Non-Centralized Clearing Derivatives Transactions by Financial Institutions." Two departments announced that by 2027, the national new energy utilization rate should not be less than 90%.

Spot fundamentals, downstream enterprises are currently in the pre-Chinese New Year stockpiling period, with some purchasing as needed. After the supply of mainstream lead ingot production areas decreased, downstream enterprises turned to consuming lead ingots from nearby warehouses, leading to an expanded decline in social inventory. Currently, the haze warning in Henan has been lifted, and attention will shift to the production dynamics of enterprises in Anhui. Meanwhile, the pre-holiday stockpiling expectations of downstream enterprises remain, and the decline in lead ingot social inventory may continue.