Fund Enthusiasm Drives High Lead Prices, Caution Advised as Fundamentals May Drag Down Lead Prices [SMM Lead Morning Meeting Minutes]

Futures:

Overnight, LME lead opened low at $2,046.5/mt. During the Asian session, it initially rose then fell. Entering the European session, driven by short covering, LME lead continued to strengthen, hitting a high of $2,088.5/mt, marking a near one-month high. It hovered at highs towards the session close, finally settling at $2,085.5/mt, up $25.5/mt, a gain of 1.24%. A large bullish candlestick with no lower shadow was recorded.

Overnight, the most-traded SHFE lead 2603 contract opened higher with a gap at 17,455 yuan/mt. After brief consolidation at the session's start, propelled by a significant influx of long funds, SHFE lead showed a unilateral upward trend, climbing to a high of 17,680 yuan/mt. Following a slight correction, it rose again, finally settling at 17,620 yuan/mt, up 235 yuan/mt, a gain of 1.35%. A large bullish candlestick was formed, with the KDJ lines' divergence narrowing, showing a trend towards convergence.

On the Macro Front:

The US Supreme Court did not rule on the legality of Trump's tariffs; the next decision window is next Tuesday or Wednesday. Trump stated he would impose a 25% tariff on imported chips not used for US AI. The White House indicated it may soon expand the scope of chip import tariffs. The Ministry of Finance held a national video conference on promoting a package of fiscal and financial policies to stimulate domestic demand. The State Council Information Office held a press conference on January 15 on the effectiveness of monetary and financial policies in supporting high-quality development of the real economy.

:

Due to the approaching delivery date, some suppliers waited for delivery, reducing quotations. Meanwhile, primary lead cargoes self-picked up from production sites were quoted following the market. Main origin quotations against the SMM #1 lead average price were at discounts of 30-0 yuan/mt ex-works, with a few regions maintaining premiums of 100 yuan/mt. Willingness to sell among refined lead suppliers also decreased significantly, with some secondary refined lead quotations against the SMM #1 lead average price at discounts of 200-100 yuan/mt ex-works. Downstream battery enterprises only made just-in-time procurement, while a few suppliers purchased on dips.

Inventory: On January 15, LME lead inventory decreased by 3,725 mt to 215,200 mt. As of January 12, SMM lead ingot social inventory across five regions showed an upward trend.

Today's Lead Price Forecast:

Affected by lead prices fluctuating at highs, the overall lead industry chain presented a quiet trading pattern. Primary lead smelters generally maintained a wait-and-see attitude. Although the willingness to sell among secondary lead smelters was somewhat divided, only a few enterprises chose to widen discounts to promote transactions. The most-traded SHFE lead contract entered the delivery stage today. The circulation of lead ingots in the spot market is expected to gradually increase next week. Meanwhile, the operating rate of secondary lead smelters rebounded this week, with more instances of production increases and resumptions, while purchase willingness among downstream battery producers remained weak. Under the dual factors of increasing supply expectations and weak demand performance, it is necessary to be cautious of the risk that lead prices may come under pressure and weaken subsequently.

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.