Macro Disturbances Combined with Pre-Holiday Decline in Supply and Demand Cause Lead Prices to Fluctuate Downward [SMM Lead Morning Meeting Summary]

Futures Market:

Overnight, LME lead opened at $1,971.5/mt, briefly touched $1,975.5/mt during the Asian session, then weakened throughout the European session, fluctuating around $1,950/mt, with a low of $1,942/mt. Before the close, it rebounded to recover losses, finally settling at $1,969/mt, down $3/mt or 0.15%. Overnight, the most-traded SHFE lead 2503 contract opened at 16,650 yuan/mt, slightly rose to a high of 16,675 yuan/mt in early trading, then fluctuated rangebound around the daily moving average, briefly touching a low of 16,605 yuan/mt, and finally closed at 16,640 yuan/mt, down 140 yuan/mt or 0.83%.

》Click to view SMM lead spot historical prices

Macro: US President Trump stated that tariffs would be imposed on the EU. Canadian Prime Minister Trudeau responded that Canada would implement retaliatory tariffs if necessary, supporting a one-to-one reciprocal tariff principle. Additionally, Trump announced that OpenAI, SoftBank, and Oracle jointly launched the "Stargate" project, investing at least $500 billion in AI infrastructure and creating 100,000 jobs. Most major tech stocks rose.

Spot Fundamentals:

Quotations in the Shanghai market were scarce; in Jiangsu and Zhejiang regions, JCC lead was quoted at premiums of 0-50 yuan/mt against the SHFE 2502 contract. SHFE lead fluctuated upward, with suppliers gradually completing destocking and quoting less frequently. During this period, primary lead smelters actively quoted for sales, with premiums declining daily, and some quoting on par with the SMM 1# lead average price ex-factory. Secondary lead shipments also gradually decreased, with a few quoting at discounts of around 50 yuan/mt ex-factory. Meanwhile, downstream enterprises increased holiday closures, and spot order market transactions became increasingly sluggish. Mainstream secondary refined lead was quoted at discounts of 75-50 yuan/mt against the SMM 1# lead average price ex-factory, with individual quotations around 16,750 yuan/mt delivered. Downstream battery producers had mostly completed stockpiling, and secondary lead transactions were sporadic.

Inventory: On January 21, LME lead inventory continued its downward trend, decreasing by 1,425 mt to 231,225 mt, with the decline still originating from Singapore warehouses. According to SMM, as of January 20, the total social inventory of lead ingots in five major regions tracked by SMM stood at 45,900 mt, down 1,700 mt from January 13 and approximately 800 mt from January 16.

》Click to view the SMM metal industry chain database

Lead Price Forecast Today:

In the final week before the Chinese New Year, major lead-acid battery enterprises have entered the phase of arranging holiday schedules. Downstream enterprises have completed pre-holiday stockpiling, and transactions in many regions have significantly declined. It is understood that before this year's Chinese New Year, end-use consumption in the lead-acid battery market for electric bicycles and automobiles was weak. After large-scale stockpiling by dealers in December 2024 and the conclusion of significant purchases in mid-January, producers have gradually begun to suspend operations for the holiday. In the last few trading days before the holiday, suppliers are conducting final sales and limited nearby deliveries. The festive atmosphere is becoming increasingly strong, and pre-holiday lead prices are moderately supported at the bottom, likely to continue fluctuating rangebound.