Domestic and Overseas Lead Inventories Decline, Lead Prices Expected to Hold Up Well Next Week [SMM Weekly Lead Market Forecast]

         Next week, the US Fed will make an interest rate decision for December, with market expectations of a 25-basis-point interest rate cut, which weighed on the US dollar index recently. In terms of economic data, the US October JOLTs job openings, China's November CPI annual rate, and the US September wholesale sales monthly rate are expected to be released.

On the LME lead side, LME lead inventory decreased by nearly 20,000 mt this week. The drawdown in lead ingot inventory boosted lead prices, pushing them above $2,000/mt. Meanwhile, the decline in the US dollar index may bring some upward expectations for lead prices. Lead prices are expected to hold up well next week, with LME lead trading in the range of $1,995–$2,035/mt.

Domestically, for SHFE lead, regional supply of lead ingots tightened, and lead consumption improved relatively, with visible inventory falling to a 15-month low, supporting lead prices to hold up well. However, it is worth noting that in-factory inventories at lead smelters accumulated recently, and suppliers may ship to delivery warehouses before delivery, raising caution about a pullback after lead prices surge. The most-traded SHFE lead contract is expected to trade in the range of 17,100–17,550 yuan/mt next week.

Spot price forecast: 17,050–17,400 yuan/mt. For primary lead, smelter inventory accumulated, and with stronger lead prices, spot premiums are expected to pull back. For secondary lead, smelters diverged in sales strategies, with some stockpiling in anticipation of price increases and others expanding discounts to sell. Premiums for secondary refined lead may decrease. On the lead consumption side, demand for lead-acid batteries improved relatively, with downstream enterprises purchasing as needed, but high lead prices suppressed some purchasing intentions.