SHFE Lead Strengthened Significantly, Climbing to a Nearly 40-Day High [Lead Futures Brief Review]

SMM December 26:

The most-traded SHFE lead 2602 contract opened at 17,280 yuan/mt, and driven by the overall strength in the precious metals sector, the contract price continued to climb, hitting a high of 17,585 yuan/mt during the afternoon session, marking a fresh high in nearly 40 days. It finally closed at 17,555 yuan/mt, up 290 yuan/mt, or 1.68%, recording a four-day winning streak.

Recently, tight raw material supply has persisted without easing, with some smelters having shifted to consuming in-factory inventory to maintain production. Coupled with production cuts at secondary lead enterprises due to environmental protection-related controls in east China, supply has been further constrained. Meanwhile, affected by the continuous rise in lead prices, downstream battery enterprises have become more cautious in procurement, mostly shifting to consuming inventory and maintaining rigid demand. Wait-and-see sentiment is strong in the market, leading to an expansion in the discount for secondary refined lead offers. The current market overall exhibits a weak supply-demand pattern, and caution is warranted against a pullback after rapid rise in lead prices.

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