The bullish and bearish factors in the lead industry chain are intertwined, and the lead price is expected to continue fluctuating [SMM Lead Morning Meeting Minutes]

Futures:

Overnight, LME lead opened at $1,957/mt, hovered around the daily moving average during the Asian session, and briefly fluctuated lower after entering the European session, hitting a low of $1,951.5/mt before turning upward, reaching a high of $1,695.5/mt. It gave back some gains before the close, finally settling at $1,960/mt, down $1/mt or 0.05%, forming a small bullish candlestick.

The SHFE lead 2601 contract saw a trading volume of 8,660 lots and an open interest of 21,851 lots; the SHFE lead 2602 contract saw a trading volume of 19,315 lots and an open interest of 59,494 lots. The most-traded SHFE lead contract officially rolled over to the 2602 contract.

Overnight, the most-traded SHFE lead 2602 contract opened at 16,800 yuan/mt. At the beginning of the session, due to increased positions by bulls, SHFE lead fluctuated considerably between 16,810 yuan/mt and 16,700 yuan/mt. After hitting a low of 16,705 yuan/mt, it bottomed out and rose all the way to 16,815 yuan/mt before pulling back again. It consolidated before the close, finally settling at 16,795 yuan/mt, down 15 yuan/mt or 0.09%, forming a small bearish candlestick.

On the macro front:

The US unadjusted CPI annual rate for November came in at 2.7%, lower than the market expectation of 3.1%; the US unadjusted core CPI annual rate for November was 2.6%, the lowest since March 2021. US federal funds rate futures indicated that the probability of a US Fed interest rate cut in January next year rose from 26.6% to 28.8%. The State Administration for Market Regulation stated that it will comprehensively rectify "involution-style" competition and promote the formation of a market order characterized by high quality and good prices with benign competition.

:

In Shanghai, Southern lead was quoted at 16,800-16,815 yuan/mt, at a premium of 50 yuan/mt against the SHFE lead 2601 contract; in Jiangsu and Zhejiang, JCC lead was quoted at 16,800-16,815 yuan/mt, at a premium of 50 yuan/mt against the SHFE lead 2601 contract. SHFE lead continued to be in the doldrums. Suppliers held prices firm for shipments. Spot availability in Jiangsu, Zhejiang, and Shanghai was limited, with quotations generally at premiums of 50 yuan/mt against the SHFE lead 2601 contract. Before the year-end, suppliers actively sold 2025 primary lead long-term contracts or existing spot orders. Spot availability of secondary refined lead was limited, and suppliers were reluctant to offer quotes. The mainstream tax-included quotations were at premiums of 0-50 yuan/mt against the SMM #1 lead average price. Downstream wait-and-see sentiment was strong, with mostly just-in-time procurement maintained.

Inventory: On December 19, LME lead inventory decreased by 3,450 mt to 262,125 mt. As of December 18, the total social inventory of lead ingots across five regions tracked by SMM stood at 20,500 mt, basically unchanged from December 11 but down 1,400 mt from December 15.

Today's lead price forecast:

Recently, some primary lead smelters were gradually resuming production, but primary lead ingot inventory had not increased significantly. The market remained in the off-season for lead-acid battery retirement, with limited raw material supply. Coupled with production cuts by secondary lead smelters due to environmental protection-related controls in east China, lead ingot production still showed a declining trend this week. Downstream battery plants, affected by declining end-use consumption, are cautious in procurement and mostly maintain rigid demand, resulting in low market trading activity. Overall, lead prices are expected to maintain a fluctuating trend in the short term. Subsequent attention should focus on the actual progress of production resumptions at this smelter and whether downstream battery enterprises will strengthen their stockpiling willingness for the New Year's Day holiday.

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 model, and are for reference only, not constituting decision-making advice.