Lead Prices to Return to Fundamentals Trading, Focus on Subsequent Changes in Inventory and Raw Material Supply [SMM Lead Morning Meeting Minutes]

Futures:

Last Friday, LME lead opened at $2,005.5/mt. On the first trading day of 2026, overseas market trading was sluggish, and as the speculative frenzy in precious metals subsided, LME lead overall trended in the doldrums. It finally closed at $1,994/mt, down 0.57%.

Last Friday, SHFE lead was closed due to the New Year's Day holiday, and trading resumed today.

On the macro front:

During the New Year's Day period, the US launched a "blitz" against Venezuela: Trump stated he would "manage" Venezuela until a "safe" transition is implemented, deeply intervening in its oil industry. Additionally, according to Bloomberg, silver futures accounted for 9% of the Bloomberg Commodity Index weighting in 2025, while the target weighting for 2026 is just under 4%, implying over $5 billion in open interest needs to be cleared during the five-day roll period starting January 8. Gold futures are expected to see approximately $6 billion sold.

:

In the lead spot market before the holiday, the SHFE lead price center moved further downward. Due to the year-end transition, most suppliers had suspended trading, and quotations in the Jiangsu, Zhejiang, Shanghai market were scarce. Meanwhile, downstream enterprises were also engaged in inventory checks or were on holiday, resulting in few inquiries and sluggish transactions in the spot market. Price-wise, for primary lead, cargoes self-picked up from production sites in mainstream producing areas were quoted at premiums of -50~0 yuan/mt against the SMM #1 lead average price, ex-works.

Inventory side: As of January 2, 2026, LME lead inventory decreased by 2,600 mt to 239,325 mt; as of December 31, 2025, the total weekly SHFE lead ingot inventory was 28,004 mt, an increase of 909 mt WoW.

Today's Lead Price Forecast:

Before the New Year's Day holiday, the speculative frenzy in silver and other precious metals ended. Subsequently, the lead market is expected to return to fundamentals. Many downstream enterprises were on holiday during the New Year's Day period, while primary lead enterprises resumed operations after maintenance. Given the supply-demand mismatch, the lead price center is expected to move downward. However, considering the current social inventory base is under 20,000 mt and the supply gap for lead concentrates persists, lead prices are expected to exhibit some resistance to decline.

Data Source Statement: Data other than public information is processed by SMM based on public information, market communication, and SMM's internal database model, for reference only and does not constitute decision-making advice.