Upstream and Downstream Enterprises Close Accounts for Inventory, Spot Lead Market Trading Activity Expected to Be Poor [SMM Lead Morning Meeting Minutes]

Futures:

On Friday, LME lead was closed due to the Christmas holiday.

On Friday night, the most-traded SHFE lead 2602 contract opened at 17,460 yuan/mt, fluctuated upward at the beginning, briefly pulled back during the night, and then rose again, reaching a high of 17,585 yuan/mt near the close, finally settling at 17,585 yuan/mt, up 30 yuan/mt or 0.17%, forming a small bullish candlestick.

On the macro front:

CME Group raised the performance bond for all metal products. The Japanese cabinet approved a record initial budget for fiscal 2026, totaling 12.23 trillion yen. Sanae Takaichi: A primary fiscal surplus is expected for the first time in 28 years in fiscal 2026.

China's Ministry of Finance: Next year, the fiscal expenditure will be expanded, with a deepened implementation of the special action plan to boost consumption; funds will continue to be allocated to support trade-in policies for consumer goods; efforts will be made to promote employment and income growth among residents. National Bureau of Statistics (NBS): From January to November, the profits of industrial enterprises above designated size grew by 0.1%. National Development and Reform Commission (NDRC): For the "new three" industries—PV, lithium-ion battery, and NEV—the key lies in regulating order and leading through innovation.

SHFE lead rose sharply, but there were few circulating cargoes in the spot market. Most suppliers had completed their inventory clearance before the end of the year and were waiting for the new year. During this period, the discount on ex-works quotations for electrolytic lead self-picked up from production sites widened, quoted at premiums of -60~+50 yuan/mt against the SMM #1 lead average price. The mainstream tax-inclusive ex-works quotations for secondary refined lead spot orders were -75~0 yuan/mt against the SMM #1 lead average price, with some cargoes at -125 yuan/mt. The mainstream tax-exclusive ex-works quotations for refined lead were around 15,950 yuan/mt. Only a few downstream enterprises purchased as needed, while others used long-term contracts, resulting in low trading activity in the spot market.

 Inventory: On December 26, LME did not release inventory data due to the Christmas holiday. As of December 25, SMM's five-region social inventory of lead ingots showed a declining trend.

Today's lead price forecast:

Due to the holiday, SHFE lead only traded for three days, and as it is the end of 2025, upstream and downstream enterprises are closing their books and taking inventory, which is expected to result in poor trading activity in the lead spot market. However, it is worth noting that the social inventory of lead is at a 16-month low, and smelter inventories are also low. Coupled with the rise in prices of by-products such as silver, this will support lead prices to hold up well.

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