Overseas and domestic post-holiday inventory buildup is limited, and lead prices are expected to fluctuate at highs in the short term [SMM Lead Morning Meeting Minutes]

Futures:

Overnight, LME lead opened at $2,008/mt. After opening, LME lead held up well, coupled with a post-holiday decline in LME lead inventory, the overall price center moved upward and traded above all moving averages, reaching a high of $2,030.5/mt, the highest level in nearly one and a half months. It finally closed at $2,029.5/mt, up 1.78%.

Overnight, the most-traded SHFE lead 2602 contract opened at 17,385 yuan/mt. Post-holiday lead ingot social inventory buildup was limited, combined with procurement from downstream enterprises resuming production, lead prices fluctuated at highs, trading mostly within the range of 17,400-17,450 yuan/mt during the evening session. SHFE lead eventually closed at 17,455 yuan/mt, up 0.32%; its open interest reached 49,402 lots, an increase of 1,858 lots from the previous trading day.

On the macro front:

After US forces raided Caracas and took control of Maduro, Trump warned Venezuela's acting President Rodriguez must cooperate with the US, otherwise she would face a "higher cost" than Maduro. Venezuela launched a nationwide search for personnel supporting the US attack, and a senior UN official stated the US military raid violated international law. Separately, the US December ISM Manufacturing PMI unexpectedly recorded the largest contraction since 2024, with inventory being a drag. 2026 FOMC voter, Minneapolis Fed President Kashkari: the unemployment rate could jump; believes interest rates are now close to neutral.

:

In the lead spot market yesterday, the first trading day after the holiday, SHFE lead started the year on a positive note. Suppliers actively offered quotes and sold cargoes, while circulating supply in the Jiangsu, Zhejiang, Shanghai market was limited, with few offers. Simultaneously, offers for cargoes self-picked up from smelters' production sites increased significantly. Mainstream origin quotations were at premiums of 0-50 yuan/mt against the SMM #1 lead average price ex-works, while secondary lead was mostly sold at discounts. Secondary refined lead quotations were at discounts of 150-100 yuan/mt against the SMM #1 lead average price ex-works. Downstream enterprises, having resumed production, restored just-in-time procurement. Inquiry activity improved compared to pre-holiday levels, but due to high prices, restocking was primarily for just-in-time needs only.

Inventory: As of January 5, LME lead inventory decreased by 2,425 mt to 236,900 mt; SMM lead ingot social inventory across five regions increased slightly compared to pre-holiday levels.

Today's lead price forecast:

Following the New Year holiday, upstream and downstream enterprises in the lead industry chain have largely returned to normal trading, especially downstream enterprises which have successively resumed work and started purchasing as needed. During the holiday period, except for downstream lead-acid battery enterprises which generally had holidays, lead smelters maintained normal production. Lead ingot inventory saw some buildup during the holiday, reflected in both smelter plant warehouses and social warehouses. It is noteworthy that the spread between futures and spot prices for lead has widened. If downstream purchasing does not show significant improvement in the subsequent period, suppliers may opt to ship to delivery warehouses instead. It is expected that the visible inventory of lead ingots still has some room for increase.

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