Approaching Year-End Trading Activity Is Light, Lead Prices Continue to Fluctuate and Consolidate [SMM Lead Morning Meeting Summary]

Futures:

Overnight, LME lead opened at $1,971.5/mt, held up well during the Asian session, and continued to strengthen upon entering the European session, touching a high of $1,995/mt. It then pulled back, falling below the intraday moving average, and finally closed at $1,983/mt, up $13/mt or 0.66%.

Overnight, the most-traded SHFE lead contract opened at 17,030 yuan/mt. After a slight rise to a high of 17,130 yuan/mt at the beginning of the session, it fell to a low of 17,000 yuan/mt. Following a brief consolidation, it rose to catch up with gains and finally closed at 17,050 yuan/mt, up 85 yuan/mt or 0.50%.

On the macro front: On December 23, supported by resilient consumer and business spending as well as more stable trade policies, the US economy expanded at its fastest pace in two years in Q3. The US Consumer Confidence Index plunged to 116.8 in December; the Consumer Expectations Index held steady at 70.7, but has now remained below 80 for 11 consecutive months, a threshold signaling an impending economic recession. The National Housing and Urban-Rural Development Work Conference stated that efforts in 6 will focus on stabilizing the real estate market, with city-specific policies to control new supply, reduce inventory, and optimize supply. It will promote the acquisition of existing commercial housing for use as government-subsidized housing, resettlement housing, dormitories, and talent housing. The sale of commercial housing will advance the pre-sold housing system to achieve "what you see is what you get," fundamentally preventing delivery risks.

Spot Fundamentals:

Spot supply was scarce in the Jiangsu, Zhejiang, and Shanghai markets as the year-end approached. Most suppliers had completed sales of lead ingots for the current month, and considering factors such as year-end capital withdrawal and account closing, market quotations were also limited. Additionally, quotations for primary lead cargoes self-picked up from production sites were relatively scarce, with some mainstream producing areas quoted at premiums of 0-50 yuan/mt against the SMM #1 lead average price ex-works. Meanwhile, medium and large downstream enterprises successively closed accounts and suspended procurement, leading to a noticeable reduction in inquiries. Trading in the spot market was sluggish on both sides.

On December 23, LME lead inventory decreased by 2,850 mt to 253,100 mt. As of December 22, SMM lead ingot social inventory across five regions showed a downward trend.

Today's Lead Price Forecast:

Approaching the year-end, both supply and demand in the lead market were weak. Circulating supply decreased in regions such as Henan and Hunan, while procurement by large-scale downstream battery enterprises gradually reduced. Lead futures prices held up well this week, but secondary refined lead producers struggled to follow the gains effectively, with spot quotations remaining at small discounts. Battery producers adopted a wait-and-see approach and purchased cautiously. Stocking demand before the New Year's Day holiday was sluggish. Upward pressure on lead prices remains in the short term, and prices are expected to continue consolidating before the New Year's Day holiday.