Macro uncertainties are significant, and fundamentals are expected to support lead prices to hold up well in the short term [SMM Weekly Lead Market Forecast]

         Next week, key macro data releases include China's September CPI year-on-year, the US September seasonally unadjusted CPI year-on-year, and US September retail sales month-on-month. Meanwhile, the US Senate failed for the seventh time to pass a short-term funding bill to end the government shutdown, which has now entered its tenth day. The unresolved US government shutdown has caused staff shortages in some critical sectors and delayed the release of economic data. Reports indicate that over 90% of the US Securities and Exchange Commission staff are on leave, bringing IPO approvals and securities market supervision to a near standstill.

On the LME lead front, LME lead inventory edged down this week. Notably, the LME cash-3M backwardation/contango narrowed to -$29.64/mt. Combined with strong demand for high-grade lead ingots in Southeast Asian markets, this may support lead prices to hold up well in the short term. However, with the US government shutdown still deadlocked and economic data releases postponed, market uncertainty persists, warranting caution against a pullback after rapid rise in lead prices. LME lead is expected to trade between $2,000/mt and $2,065/mt.

Domestically, as the delivery date for the SHFE lead 2510 contract approaches next week, suppliers are moving stocks to delivery warehouses, which may raise expectations of a rise in visible inventory. Meanwhile, domestic secondary lead smelters are gradually resuming production after maintenance. Lead consumption, which was front-loaded in September, may lead to increased inventory buildup pressure in October. Additionally, recent lithium battery export control policies have sparked market speculation that some consumption expectations could shift back to lead-acid batteries, potentially supporting lead prices to hold up well in the short term. The most-traded SHFE lead contract is forecast to trade between 16,900 yuan/mt and 17,250 yuan/mt next week.

Spot price forecast: 16,800–17,100 yuan/mt. For primary lead, smelters continue to resume production after the holiday. Ahead of the SHFE lead delivery, suppliers are moving stocks to delivery warehouses, which is expected to limit spot market availability, leading suppliers to refuse to budge on prices. For secondary lead, expectations of production resumptions by lead smelters in Anhui are rising, which may increase market supply next week and potentially widen the discount for secondary refined lead. On the demand side, October lead-acid battery market consumption is mixed, and pre-holiday stockpiling already front-loaded some lead demand. Downstream enterprises mostly maintain purchasing as needed.