Refined Lead Inventory Buildup Pressure Slows Down Before the Holiday, Lead Prices May Continue to Hold Up Well [SMM Lead Morning Meeting Minutes]

Futures:

Overnight, LME lead opened at $1,988.5/mt, fluctuated upward during the Asian session. Upon entering the European session, it came under pressure and traded in the doldrums below the daily moving average, testing the $1,990/mt level, before edging up slightly just before the close. It finally settled at $1,999.5/mt, up $16.5/mt, or 0.83%.

Overnight, the most-traded SHFE lead contract opened at 17,215 yuan/mt. After opening, it fluctuated rangebound around the daily moving average, touching a high of 17,285 yuan/mt and a low of 17,205 yuan/mt, before finally settling at 17,275 yuan/mt, up 140 yuan/mt, or 0.82%.

On the macro front: On December 24, US initial jobless claims fell unexpectedly last week, but the unemployment rate likely remained elevated in December due to sluggish employment. The US Department of Labor reported on Wednesday that seasonally adjusted initial jobless claims for the week ending December 20 fell by 10,000 to 214,000. The US plans to impose additional tariffs on China's semiconductor industry starting in 2027, to which the Ministry of Foreign Affairs responded. The central bank emphasized enhancing financial support for key areas such as domestic demand expansion, technological innovation, and small and medium-sized enterprises.

Spot Fundamentals:

Inventory in Jiangsu, Zhejiang, and Shanghai area warehouses remained low, with limited spot cargoes available. As the year-end approaches, most suppliers have completed destocking, resulting in scarce market offers. SHFE lead continued to hold up well today, successfully breaking through the 17,000 yuan/mt level. Some suppliers continued destocking, with cargoes self-picked up from lead smelters' production sites being the majority. However, most downstream enterprises had suspended procurement, leading to sluggish market transactions.

Inventory: On December 24, LME lead inventory decreased by 4,200 mt to 248,900 mt. As of December 22, SMM social inventory of lead ingots across five regions showed a downward trend.

Today's Lead Price Forecast:

In the spot market, supply of circulating cargoes was partially tight. Although lead-acid battery operating rates declined due to the traditional winter off-season, refined lead inventory faced no significant buildup pressure. Furthermore, after the transition period for the new national standard ended and regulations tightened, end-use consumption acceptance declined. Expected declines in sales of new national standard e-bikes may indirectly affect battery orders and winter operating plans. Battery producers adopted a wait-and-see approach with cautious procurement, resulting in relatively sluggish stocking demand. A significant rise in precious metal prices this week boosted the non-ferrous metals sector. Lead prices may continue to hold up well in this atmosphere ahead of the New Year's Day holiday.