Amid the market frenzy atmosphere, lead prices show a fluctuating trend with a tendency to hold up well [SMM Lead Morning Meeting Minutes]

Futures:

Overnight, LME lead opened at $2,022/mt and, amid a frenzy of capital inflows into nonferrous metals, showed a stepwise upward trend, successively breaking above $2,040/mt, $2,025/mt, and $2,070/mt. It hit a session high of $2,078/mt, marking the highest level in nearly two months, before finally closing at $2,071/mt, up 2.04%.

Overnight, the most-traded SHFE lead 2602 contract opened at 17,530 yuan/mt. Boosted by LME lead's gains, SHFE lead rose sharply after opening and quickly climbed above 17,700 yuan/mt, reaching a session high of 17,760 yuan/mt, also the highest level in nearly two months. SHFE lead then hovered at highs during subsequent trading hours, ultimately closing at 17,735 yuan/mt, up 1.28%. Its open interest reached 51,392 lots, an increase of 392 lots from the previous trading day.

On the Macro Front:

The PBOC outlined its key tasks for 2026: intensifying counter-cyclical and cross-cyclical adjustments, and flexibly and efficiently utilizing various monetary policy tools including RRR cuts and interest rate cuts. The US Supreme Court is set to rule on global tariff issues on January 9. Meanwhile, divergences persist within the US Fed, with Barkin emphasizing "fine-tuning" and Milan suggesting interest rate cuts should exceed 100 basis points this year. Additionally, the "Coalition of the Willing" reached a consensus that the UK and France will deploy troops to Ukraine after a peace agreement with Russia is reached. Venezuela's Attorney General emphasized that Maduro enjoys absolute immunity, while the Acting President stated that Venezuela is not ruled by external forces.

:

In the lead spot market yesterday, SHFE lead held up well. Suppliers sold goods following the market trend, leading to an increase in quotations. Concurrently, primary lead smelters also actively sold cargoes self-picked up from their production sites. Quotations from mainstream producing areas were at premiums of 0-50 yuan/mt against the SMM #1 lead average price, ex-works. Furthermore, the divergence in sales strategies among secondary lead smelters widened, with some holding prices firm and selling based on bullish views. Quotations for secondary refined lead were at discounts of 150-0 yuan/mt against the SMM #1 lead average price, ex-works. Downstream enterprises, however, were mostly cautious due to high prices and adopted a wait-and-see approach, with the majority purchasing based on long-term contracts. Trading in the spot order market was relatively weak.

Inventory: As of January 6, LME lead inventory decreased by 3,550 mt to 233,350 mt, with the main declines seen in warehouses in Kaohsiung and Singapore. Separately, SMM's social inventory of lead ingots across five regions increased slightly compared to pre-holiday levels.

Today's Lead Price Forecast:

The domestic macro atmosphere is warm, while overseas geopolitical and tariff issues persist, leading to another frenzy of capital inflows into the precious and nonferrous metals markets. Fundamentally for lead, although lead consumption performance is average, the base of visible lead ingot inventory is less than 20,000 mt. Simultaneously, tight supply issues for raw materials like lead concentrates and scrap have not improved, particularly in the secondary lead sector, which is unlikely to ramp up production quickly. In the short term, lead prices are expected to follow the strong performance of nonferrous metals. Attention should also be paid to the widening spread between futures and spot prices, as well as the possibility of an increase in visible inventory due to expectations of shipments to delivery warehouses.

Data Source Statement: Data other than publicly available information 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.