Next week, due to Labour Day and the UK's bank holiday, both the SHFE and LME will be closed on May 5 and resume normal trading on May 6. The major macro event will be the US Fed's FOMC interest rate decision announcement. Especially after the US imposed tariff hikes on various countries in April, market attention to the prospects of a US dollar interest rate cut has increased. According to the CME "FedWatch Tool", the probability of the Fed maintaining interest rates unchanged in May is 92.3%.
For LME lead, LME lead inventory continued to decline this week. As of April 29, total lead inventory fell by 6,800 mt compared to last Friday, while the LME lead cash-3M contango narrowed to -$11.35/mt. With positive fundamental data for lead and a relatively easing situation regarding the US tariff hikes, the largest risk factor in overseas markets, the center of LME lead's operation has gradually shifted upwards. However, there is uncertainty about whether it can return to the round number threshold of $2,000/mt. Lead prices are expected to operate within the range of $1,930-1,995/mt.
Domestically, for SHFE lead, based on the holiday schedules of upstream and downstream enterprises in the lead industry chain, downstream lead-acid battery enterprises will have longer holidays than lead smelters. Weakened consumption may increase expectations for post-holiday inventory buildup of lead ingots. Additionally, the supply of raw materials such as lead concentrates and scrap is tight, making it difficult for lead smelters to procure, especially with scrap battery prices remaining high. Secondary lead enterprises are generally operating at a loss, dampening their production enthusiasm. Lead prices are expected to be in the doldrums, with the most-traded SHFE lead contract operating within the range of 16,600-17,050 yuan/mt.
Spot price forecast: 16,500-16,850 yuan/mt. After the Labour Day holiday, lead-acid battery enterprises will resume normal production. Attention should be paid to the restocking actions of downstream enterprises after the holiday. Meanwhile, due to the differing holiday schedules of upstream and downstream enterprises, lead smelters face a higher risk of inventory buildup during the holiday. Post-holiday, the availability of lead in the market is expected to increase, and spot transactions may remain at a discount. For secondary lead, due to losses, the discount for secondary refined lead is unlikely to widen further.
