Lead Prices Trended Weaker, Today's Focus Was on Whether Downstream Restocking Willingness Could Improve [SMM Lead Morning Meeting Minutes]

Futures:

Overnight, LME lead opened higher with a gap at $2,002/mt, fluctuated rangebound above the daily average line during the Asian session, and hit a high of $2,028/mt before plummeting. Entering the European session, the decline continued. After touching a low of $1,989/mt, LME lead rebounded from the low due to short-covering, and finally closed at $2,009/mt, up $9.5/mt or 0.48%, marking a three-day winning streak.

Overnight, the most-traded SHFE lead 2602 contract opened at 17,465 yuan/mt. It fluctuated rangebound above the daily average line at the beginning of the session. Affected by the broad decline in nonferrous metals, SHFE lead fluctuated downward all the way, touched a low of 17,330 yuan/mt, and finally closed at 17,380 yuan/mt, down 110 yuan/mt or 0.63%. The KDJ line gap narrowed, ending a five-day winning streak and forming a small bearish candlestick.

On the macro front:

International crude oil rebounded as major obstacles remained in the US-led peace talks to end the Russia-Ukraine war, and geopolitical disturbances continued in the Middle East. US bond volatility was expected to record its largest annual decline since 2009. China's Customs Tariff Commission of the State Council released the "2026 Tariff Adjustment Plan." The Ministry of Finance and the State Taxation Administration issued an announcement regarding the pre-tax deduction of advertising and business promotion expenses. The National Market Regulation Work Conference was held in Beijing. The meeting pointed out that 2026 will see strengthened anti-monopoly and anti-unfair competition law enforcement, with in-depth rectification of "involution-style" competition, etc.

:

Spot supply available in the Jiangsu, Zhejiang, and Shanghai markets was relatively scarce. Most suppliers suspended sales due to completed inventory clearance and year-end account closing, resulting in few market quotations. However, with SHFE lead rising sharply today, some available cargoes self-picked up from production sites were gradually sold at discounts (against the SMM #1 lead average price). The mainstream tax-included ex-factory quotations for refined lead spot orders were at discounts of 100-0 yuan/mt against the SMM #1 lead average price. The mainstream tax-excluded ex-factory quotations for refined lead were around 16,150 yuan/mt. Most enterprises refrained from selling due to chaotic market prices. Downstream enterprises planned for holidays, showing relatively poor purchasing enthusiasm and few inquiries, leading to sluggish market trading.

Inventory: On December 29, LME lead inventory decreased by 4,625 mt to 244,275 mt. As of December 29, SMM lead ingot social inventory across five regions showed a downward trend.

Today's Lead Price Forecast:

Recently, lead prices held up well. Coupled with the year-end period, suppliers actively cleared inventory and sold goods, with some offering large discounts, while downstream enterprises made purchases as needed, driving down lead ingot social warehouse inventory. However, the lead ingot inventory base in the Jiangsu, Zhejiang, and Shanghai regions was low, downstream purchases were limited, and inventory changes were relatively small. Trading activity in the spot market was expected to remain weak before the New Year's Day holiday, and social inventory was forecast to maintain at low levels. Following the New Year's Day holiday, some downstream enterprises are expected to suspend operations, while primary lead smelters resume production. It is anticipated that social inventory of lead ingots may stop falling and rebound after the holiday, with caution advised against a potential retreat after a rapid rise in lead prices.

Data Source Statement: Except for publicly available information, other data are processed by SMM based on public information, market communication, and SMM's internal database model, and are for reference only, not constituting decision-making advice.