Bull Enthusiasm Drives SHFE Lead to Hover at Highs [Lead Futures Brief Review]

SMM Jan. 6:

The most-traded SHFE lead 2602 contract opened at 17,455 yuan/mt today. At the beginning of the session, boosted by broad gains in nonferrous metals and increased positions by bulls, SHFE lead rose to around 17,560 yuan/mt and then fluctuated, hitting a high of 17,670 yuan/mt in the afternoon before pulling back slightly toward the close. It finally ended at 17,520 yuan/mt, up 125 yuan/mt or 0.72%. The daily chart formed a bullish candlestick with a long upper shadow.

Recently, lead prices have been fluctuating at highs. As secondary lead smelters need to stockpile raw materials before the Chinese New Year, they have again raised raw material purchase prices to compete for supply, which has slightly improved the willingness of some recycling enterprises in north and east China to sell. Meanwhile, downstream battery enterprises are facing weak end-use consumption and significant inventory buildup of new batteries, leading to low purchase willingness for lead ingots and causing a trend of finished product inventory accumulation at lead smelters. In the short term, lead prices are expected to hover at highs, supported by tight raw material supply and broad gains in the nonferrous metals sector, but caution is needed against the drag risks from downstream finished product inventory buildup and weak actual end-use consumption.

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