Refined Lead Supply Tightens, Expectations for Pre-Holiday Stockpiling Gradually Materialize, Lead Prices Show Moderate Support, Holding Steady Above 17,000 [SMM Lead Morning Meeting Minutes]

Futures:

Overnight, LME lead opened at $2,025/mt, fluctuating rangebound around the daily moving average during the Asian session. It then fluctuated downward throughout the European session, touching a low of $2,012/mt before fluctuating rangebound. It later rose to recover the losses and finally closed at $2,033.5/mt, up $9/mt, a gain of 0.44%.
Overnight, the most-traded SHFE lead contract opened at 17,100 yuan/mt, fluctuating rangebound around the daily moving average at the beginning of the session before edging up to a high of 17,105 yuan/mt, finally closing at 17,100 yuan/mt, flat.

On the macro front: Pan Gongsheng, the central bank governor, stated that 2026 will continue to implement an appropriately accommodative monetary policy, flexibly and efficiently utilizing various monetary policy tools including RRR cuts and interest rate cuts to maintain ample liquidity. The US Q3 2025 GDP final figure showed an annualized QoQ growth of 4.4%, higher than the preliminary reading of 4.3%, marking the fastest growth rate in nearly two years. The US Fed's favoured inflation gauge, the core PCE price index for November, rose 2.8% YoY and 0.2% MoM, both in line with expectations.

Spot fundamentals:

Lead warrant quotations remained scarce in the Jiangsu, Zhejiang, Shanghai region, with individual quotations against the SHFE lead 2603 contract at premiums of 100 yuan/mt finding difficult to trade. The decline in lead prices slowed down, and downstream enterprises' inquiry enthusiasm relatively improved. A small number of enterprises intended to conduct conventional stockpiling before the Chinese New Year for lead ingots. However, due to ample circulating supply in the market and strong fear of further price declines, transactions only improved relatively in some regions or enterprises. Currently, mainstream producing area quotations for primary lead saw narrowed discounts, reported at discounts of 50-0 yuan/mt against the SMM #1 lead average price, with some enterprises leaning towards parity. Secondary refined lead quotations were at discounts of 150-50 yuan/mt ex-works against the SMM #1 lead average price.

Inventory: On January 21, LME lead inventory fell by 4,225 mt to 218,425 mt. As of January 22, SMM lead ingot social inventory across five regions continued its accumulation trend.

Today's lead price forecast:

Lead prices stabilized above the 17,000 yuan/mt level. Downstream enterprises, due to weak consumption, generally maintained a wait-and-see and cautious attitude towards lead ingot procurement. Meanwhile, suppliers, facing increased inventory pressure, continued to transfer inventory to social warehouses or slightly widened discount quotations to sell. Amid this week's price weakness, secondary lead profits turned from positive to negative, leading to decreased production enthusiasm among smelters, with some smelters in north China initiating maintenance holidays earlier than usual. The combined effect of relatively tightened refined lead supply and the gradual start of conventional pre-Chinese New Year stockpiling is expected to slow the subsequent accumulation of lead ingot inventory. Short-term downside support for lead prices remains moderate.