Downstream Gradually Goes on Holiday, Lead Prices Continue to Fluctuate and Consolidate [SMM Lead Morning Meeting Summary]

Futures Market:

Last Friday night, LME lead opened at $1,970/mt. During the Asian session, it rose to a high of $1,987/mt before declining. In the European session, it continued to weaken, hitting a low of $1,954.5/mt. Before the close, it slightly rebounded and finally settled at $1,965.5/mt, down $11/mt or 0.56%. Last Friday night, the most-traded SHFE lead 2503 contract opened at 16,690 yuan/mt, initially fell to a low of 16,635 yuan/mt, then rebounded and rose, eventually closing at 16,770 yuan/mt, up 75 yuan/mt or 0.45%.

》Click to View SMM Lead Spot Historical Prices

Macro Front: Key overseas macroeconomic data included the final January manufacturing PMI for the Eurozone, the final January S&P Global Manufacturing PMI for the US, the preliminary January University of Michigan Consumer Sentiment Index, and the preliminary January one-year inflation expectations for the US. Additionally, Donald Trump was sworn in as the new US President, with continued attention on the risks of tariff policy changes. Domestically, various regions in China began implementing subsidies for the purchase of mobile phones and other digital products starting January 20, which continued to boost consumption.

Spot Market Fundamentals:

Last Friday, there were few quotations in the Shanghai market. In Jiangsu and Zhejiang regions, Tongguan and JCC lead were quoted at premiums of 20-80 yuan/mt against the SHFE 2502 contract. Driven by favourable macro news, non-ferrous metals generally rose, and SHFE lead fluctuated upward. Suppliers sold at prevailing prices, but as the Chinese New Year holiday approached, the festive atmosphere in the spot market intensified. Reduced transportation vehicles and rising freight costs constrained spot trading. Additionally, downstream enterprises were about to go on holiday, and the rise in lead prices disrupted some enterprises' pre-holiday stockpiling plans, leading them to either adopt a wait-and-see approach or cancel stockpiling plans altogether. In the secondary refined lead market, supply and demand were both sluggish. Some suppliers offered discounts of 50 yuan/mt against the SMM 1# lead average price ex-factory, while other secondary refined lead quotations ranged from premiums of 0-75 yuan/mt against the SMM 1# lead average price ex-factory. Suppliers followed market trends, while most downstream battery producers had completed stockpiling, resulting in sluggish secondary lead transactions.

Inventory: On January 17, LME lead inventory fell by 2,450 mt to 236,825 mt, with the entire decline occurring in Singapore warehouses. As of January 16, LME lead inventory decreased by 2,175 mt to 236,825 mt. As of January 16, the total social inventory of SMM lead ingots in five regions reached 46,700 mt, up by approximately 800 mt from January 9 but down by 900 mt from January 13.

》Click to View SMM Metal Industry Chain Database

Lead Price Forecast:

This week, as the Chinese New Year holiday approaches, lead-acid battery enterprises are expected to enter a concentrated holiday period, further weakening lead consumption. Meanwhile, logistics vehicles are expected to operate until around January 23, allowing downstream enterprises to conduct final nearby stockpiling. On the supply side, some secondary lead enterprises are expected to follow downstream enterprises in taking holidays, while primary lead enterprises are likely to maintain normal production, potentially leading to inventory buildup pressure for lead ingots. This week, lead prices are likely to continue fluctuating within a narrow range, with trading requiring closer attention to macro and overseas market dynamics. In the latter half of the week, a situation of "prices without transactions" may emerge.