Tight Raw Material Supply Coupled with Silver Frenzy, Lead Prices Expected to Hold Up Well [SMM Lead Market Weekly Forecast]

         Next week, due to the New Year's Day holiday, the LME and SHFE will close early or have no night session on the evening of December 31, and will be closed on January 1-2, 2026. For macroeconomic data, China's official manufacturing PMI for December and the US initial jobless claims for the week ending December 27 will be released. Meanwhile, attention should be paid to the release of the US Fed's monetary policy meeting minutes.

For LME lead, LME lead inventory showed a downward trend before Christmas, while the LME Cash-3M contango narrowed WoW to -$37.81/mt, supporting lead prices to hold up well. At the same time, overseas lead concentrate TCs continued to decline, and the long-term contract premium for lead ingot in 2026 increased, which will boost lead prices to remain strong. LME lead is expected to trade at $1,980-2,030/mt next week.

Domestically, for SHFE lead, due to the holiday, there are only three trading days. Coupled with the year-end period, upstream and downstream enterprises are closing accounts and taking inventory, so trading activity in the spot lead market is expected to be weak. However, it is worth noting that social inventory of lead is at a 16-month low, and smelter inventory is also low. Combined with rising prices of by-products such as silver, this will support lead prices to hold up well in the subsequent period. The most-traded SHFE lead contract is expected to trade at 17,100-17,650 yuan/mt next week.

Spot price forecast: 17,000-17,500 yuan/mt. For primary lead, smelters have resumed after maintenance, leading to a relative increase in supply. However, as suppliers clear inventory at year-end, the availability of lead ingot cargoes is expected to be limited before the New Year. Offers for lead ingot cargoes with invoices dated this month are expected to remain relatively firm, while cargoes with invoices dated next month may see a widening discount. For secondary lead, smelter profits have improved, and the impact of environmental protection measures has eased, so the availability of spot cargoes is expected to increase relatively, with a risk of widening discounts for secondary refined lead. On the consumption side, next week is the last week of 2025. Downstream enterprises are closing accounts and taking inventory at year-end, so purchasing enthusiasm is limited. The market is expected to return to normal trading after the New Year's Day holiday.