Trade Policy and Fundamentals Remain Uncertain, Lead Prices Still Need to Be Wary of Pullback [SMM Weekly Lead Market Forecast]

SMM February 14 News: Next week, there will be few significant macroeconomic data releases, mainly including China's one-year loan prime rate as of February 20, the final reading of the US February University of Michigan Consumer Sentiment Index, and the final reading of the US February one-year inflation expectations. Recently, US inflation data exceeded expectations, delaying market bets on the next US Fed interest rate cut to December, with only one 25-basis-point cut expected for the remainder of 2025. Attention should be focused on the release of the US Fed's January monetary policy meeting minutes. LME lead: This week, the US escalated its tariff policies, raising market concerns over trade friction risks, while the US dollar index weakened relatively, leading to a mixed performance in base metals. During the week, LME lead inventory increased, and the LME cash-3M contango widened by nearly $10/mt WoW, reaching -$38.39/mt as of February 13. With both bullish and bearish factors in the macro and fundamentals, lead prices may remain in a consolidation phase in the short term. LME lead is expected to trade between $1,965-2,015/mt next week. Domestic SHFE lead: With only one trading day left before the delivery of the SHFE lead 2502 contract, suppliers have increased warehouse transfers for delivery, and the accumulation of visible lead ingot inventory will weigh on lead prices. After the Lantern Festival, downstream lead enterprises have mostly resumed production, and workers are gradually returning to their posts, leading to a marginal increase in production. However, it should be noted that this incremental consumption may struggle to quickly absorb the existing lead ingot inventory, and the risk of lead price pullback remains. The most-traded SHFE lead contract is expected to trade between 16,950-17,300 yuan/mt next week. Spot price forecast: 16,800-17,050 yuan/mt. Next week, as production stabilizes across upstream and downstream enterprises in the lead industry chain and the delivery of the SHFE front-month contract is completed, spot market supply may increase, leading to more transactions at discounts. Additionally, attention should be paid to the demand increase driven by the resumption of secondary lead production, which has pushed battery scrap prices higher, raising smelting costs. The room for further expansion of secondary refined lead discounts remains limited.