Fundamentals Provide Limited Support, Lead Prices Expected to Remain in the Doldrums Next Week [SMM Weekly Lead Market Forecast]

         Next week's key events include the US Fed's FOMC interest rate decision, with major economic data releases such as the US November Durable Goods Orders MoM, US December PPI YoY, and the eurozone's preliminary Q4 GDP YoY. Additionally, the recent Greenland incident unexpectedly reversed, with the US President denying any military seizure of Greenland, withdrawing tariff threats against Europe, and promoting high-level negotiations. However, regarding Iran, a 25% tariff will be imposed on all countries trading with Iran.

On the LME lead front, overseas lead inventory reversed its trend and rebounded, surging by over 20,000 mt in a single day at the start of the week, overturning the previous destocking logic. This week, LME lead gave back all of last week's gains. Meanwhile, leading overseas lead smelters continue to advance plans for new US plant construction, while the consumption side shows no new highlights. We need to pay more attention to macro factors affecting lead prices. LME lead is expected to trade at $1,995-2,055/mt next week.

Domestically, for SHFE lead, after prices fell below the 17,000 yuan/mt mark this week, secondary refined lead profits turned from positive to negative, prompting some secondary lead enterprises to schedule early maintenance or holidays, leading to a relative tightening in supply. However, primary lead enterprises resumed operations after maintenance, largely offsetting the overall supply changes. With less than a month until the Chinese New Year, attention should turn to downstream enterprises' pre-holiday stocking expectations. However, due to weak consumption in the largest lead consumption sector—the e-bike lead-acid battery market—pre-holiday stocking demand is expected to be limited, raising caution about further downside risks for lead prices. The most-traded SHFE lead contract is expected to trade at 16,950-17,300 yuan/mt next week.

Spot price forecast: 16,850-17,100 yuan/mt. For primary lead, production resumption at primary lead enterprises, coupled with post-delivery supplies re-entering the circulation market, is expected to keep spot discounts difficult to change in the near term. For secondary lead, shrinking profits are dampening smelters' production enthusiasm, and production cuts have emerged in north China, with secondary refined lead discounts expected to hold or narrow slightly. On the lead consumption side, the lead-acid battery market's pre-holiday consumption performance remains weak, with large enterprises holding certain inventories and only some small and medium-sized enterprises beginning to plan pre-holiday stockpiling, providing limited support to lead prices.