Lead Ingot Supply Tightness Supports Lead Prices, SHFE Lead Stops Falling and Stabilizes [SMM Lead Morning Meeting Minutes]

Futures:

Overnight, LME lead opened at $1,945/mt. It moved sideways around the daily moving average during the Asian session. Entering the European session, LME lead fluctuated upward, touching a high of $1,968/mt, with its trading center rising. It pulled back slightly toward the close as the KDJ gap narrowed, finally settling at $1,961/mt, up $19/mt or 0.98%. It ended a three-day losing streak, forming a large bullish candlestick.

Overnight, the most-traded SHFE lead 2601 contract opened higher with a gap at 16,840 yuan/mt. Due to short-covering, it briefly rose to a high of 16,915 yuan/mt early in the session, then fluctuated considerably between 16,870 yuan/mt and 16,780 yuan/mt. It rebounded slightly toward the close, with its trading center rising and the KDJ gap narrowing, finally settling at 16,825 yuan/mt, up 55 yuan/mt or 0.33%, forming a small bearish candlestick.

On the macro front:

The US published a notice in the Federal Register regarding Swiss tariffs, indicating it has agreed to modify tariff rates on certain goods, with a trade agreement expected to be successfully reached by Q1 2026. The Ministry of Finance announced that stamp tax revenue from January to November 2025 totaled 404.4 billion yuan, up 27% YoY, including securities transaction stamp tax revenue of 185.5 billion yuan, up 70.7% YoY. Minister of Industry and Information Technology Li Yuecheng met with US-based Advanced Micro Devices Board Chair and CEO Lisa Su.

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Spot resources were tight in the Jiangsu, Zhejiang, and Shanghai region, with JCC lead offered at 16,820-16,840 yuan/mt. As SHFE lead prices fell, suppliers showed a strong willingness to hold prices firm, with premiums on some cargo narrowing or even turning to parity or small premiums. Secondary refined lead suppliers had a low willingness to sell, with mainstream tax-included ex-works premiums at 0-50 yuan/mt and tax-excluded prices around 15,600 yuan/mt. Downstream battery enterprises mostly adopted a wait-and-see approach, with procurement primarily for just-in-time needs, increased price negotiations, and overall sluggish transactions.

Inventory: On December 18, LME lead inventory fell by 2,875 mt to 265,575 mt. As of December 8, the total social inventory of lead ingots in five regions tracked by SMM dropped to 20,500 mt, down 10,200 mt from December 1 and down 3,200 mt from December 4, hitting a fresh 15-month low.

Today's Lead Price Forecast:

The lead market recently showed a fluctuating pattern amid weak supply and demand. Supply side, although primary lead production gradually recovered from maintenance, the current supply increment of lead ingots was limited, while heavy pollution weather warnings in north China and east China caused short-term disruptions to raw material transportation for secondary lead. Demand side, downstream lead-acid battery enterprises faced funding pressure approaching year-end, leading to cautious, just-in-time procurement, coupled with end-use consumption entering the off-season. From a comprehensive perspective, amid the interplay of "slow supply recovery" and "persistent weak demand," lead prices are expected to stop falling and stabilize, with limited room for a slight rebound.

Data Source Statement: Except for publicly available information, other data are processed by SMM based on public information, market communication, and SMM's internal database models, for reference only and do not constitute decision-making advice.