Next week, key macroeconomic data to be released include US October ADP employment, US October unemployment rate, and US October seasonally adjusted non-farm payrolls. Mid-week, the heads of state of China and the US met and reached a "trade truce." US Treasury Secretary Besant stated that the China-US trade agreement could be signed as early as next week. Additionally, the US Senate voted to terminate the comprehensive tariff policy implemented globally by former US President Trump. Furthermore, the China Nonferrous Metals Industry Association recommended considering setting capacity ceilings for bulk metals such as copper, lead, and zinc, and strictly controlling new capacity. Macro policy tailwinds have emerged frequently, with subsequent attention on specific policy announcements and their long-term impact on the lead industry chain.
On the LME lead front, overseas lead ingot markets showed destocking, with LME lead inventory dropping again by over 10,000 mt weekly, while the LME Cash-3M contango narrowed to -$33.99/mt. Meanwhile, the US Fed cut interest rates by 25 basis points as expected, and China-US economic and trade teams reached a consensus, improving macro conditions and boosting lead prices to record eight consecutive gains. Macro tailwinds may continue to ferment next week, but with China's lead ingot import window narrowing, expectations for overseas lead ingots shifting to China have decreased. LME lead is expected to trade between $1,990/mt and $2,045/mt.
Domestically, for SHFE lead, production cuts and halts at downstream lead enterprises have not fully ended, limiting improvement in lead consumption. Meanwhile, production increases and decreases coexist among secondary and primary lead producers, with secondary lead increments likely to exceed those of primary lead, potentially exacerbating expectations for subsequent lead ingot inventory buildup and weighing on lead prices. However, macro tailwinds remain effective, alleviating market pessimism. The most-traded SHFE lead contract is forecast to trade between 17,200 yuan/mt and 17,550 yuan/mt next week.
Spot price forecast: 17,100–17,300 yuan/mt. For primary lead, although some lead smelters underwent maintenance, in-factory inventory accumulated at multiple enterprises, increasing spot circulating supply, and the proportion of spot discount transactions may rise. For secondary lead, smelters represented by those in Anhui gradually resumed production, leading to an overall supply increase, coupled with imported lead supplements, potentially further widening secondary lead discounts. On lead consumption, as production cuts and halts at some downstream enterprises end, producers will resume just-in-time procurement, but end-use consumption expectations remain weak, and downstream enterprises are likely to remain relatively cautious.
