Supply Recovery Coincides with SHFE Lead Delivery Period, Caution Against Inventory Accumulation's Pressure on Lead Price Trends [SMM Lead Morning Meeting Minutes]

Futures:

Overnight, LME lead opened at $2,052.5/mt, weakened to $2,042.5/mt during the Asian session, then rebounded to around $2,060/mt and fluctuated. Entering the European session, it was pushed up by long position additions, touching a high of $2,063.5/mt, before returning to fluctuations towards the session close, finally settling at $2,060/mt, up $7/mt or 0.34%. The KDJ lines converged, forming a small bullish candlestick.

Overnight, the most-traded SHFE lead 2603 contract opened at 17,375 yuan/mt. After briefly touching a low of 17,330 yuan/mt early in the session, it bottomed out and fluctuated upward, reaching a high of 17,475 yuan/mt, then fluctuated considerably between 17,410 and 17,470 yuan/mt, finally settling at 17,435 yuan/mt, up 75 yuan/mt or 0.43%. It formed a small bullish candlestick.

On the macro front:

US CPI growth remained stable in December, while core CPI was slightly below expectations. Trump praised the inflation data, saying Powell should cut interest rates significantly. Fed mouthpiece: The December CPI is unlikely to change the current wait-and-see stance. LME copper inventories fell 22% to a six-month low. The US eased restrictions on Nvidia's H200 chip exports to China. The Guangzhou Futures Exchange adjusted the transaction fee standards and trading limits for lithium carbonate futures related contracts. The MIIT held the 18th manufacturing enterprise symposium, focusing on stabilizing effective investment in manufacturing and consciously resisting involution.

:

SHFE lead fluctuated downward. Suppliers sold cargoes following the market. Warrant cargo quotations against the SHFE contract were basically stable compared to the previous day, while quotations for primary lead cargoes self-picked up from the production site decreased. Mainstream origin quotations were at discounts of 30-0 yuan/mt against the SMM #1 lead average price, ex-factory. Mainstream spot order quotations for refined lead with tax were at discounts of 250-100 yuan/mt against the SMM #1 lead average price, ex-factory. Quotations for refined lead without tax ranged from 15,650 to 15,800 yuan/mt, ex-factory. With lead prices edging down, some suppliers, fearing further declines, showed increased willingness to sell. Downstream battery producers' inquiry activity improved, with some purchasing low-priced cargoes in small quantities, but wait-and-see sentiment remained strong.

Inventory: On January 14, LME lead inventories decreased by 2,525 mt to 218,925 mt. As of January 12, SMM lead ingot social inventories across five regions showed an upward trend.

Today's Lead Price Forecast:

Recently, SHFE lead fluctuated downward, leading to a cooling of spot market sentiment. Most primary lead smelters followed the market, generally lowering their selling quotations; secondary lead enterprises, with strengthened bearish expectations, widened their discount margins. Supply side, a large smelter in east China plans to resume production this weekend, which is expected to gradually release lead ingot capacity; meanwhile, after the SHFE lead delivery concludes, a considerable amount of delivered lead ingots is expected to flow into social warehouses. The combination of these factors is likely to lead to a further accumulation of social inventory for lead ingots. Against the backdrop of no significant improvement in current consumption, market supply pressure is increasing, and there is a high risk that lead prices will remain under pressure in the short term.

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.