Stockpiling Demand Before the New Year Is Expected to Be Limited, Remain Vigilant Against Further Downside Risk in Lead Prices [SMM Lead Morning Meeting Minutes]

Futures:

Last Friday, LME lead opened at $2,027/mt, fluctuated downward during the Asian session, and rose first then fell after entering the European session. It touched a high of $2,038/mt before plunging, probed a low of $2,018/mt toward the close, and finally ended at $2,035/mt.

On Friday night, the most-traded SHFE lead 2603 contract opened at 17,170 yuan/mt, fluctuated downward at the beginning of the session and probed a low of 17,090 yuan/mt, then fluctuated upward and touched a high of 17,215 yuan/mt, finally closing at 17,145 yuan/mt, up 0.29%, forming a doji bearish candlestick.

On the macro front:

US media: The US Treasury Department reportedly took initial steps to intervene in the foreign exchange market. The US announced a new round of sanctions on entities and oil tankers related to Iran. US Treasury Secretary Bassett hinted that the US might cancel some additional tariffs on India. IMF: The US dollar's share of global foreign exchange reserves fell below 60%. The work conference on the operation of the Chinese market and consumption promotion was held in Beijing. The CSRC strictly investigated private fund violations including illegal fundraising, misappropriation, self-financing, and interest transfer. CMOC: Completed the acquisition of a gold mine project, involving gold resources of 5.013 million ounces. Hunan Gold: Plans to purchase 100% equity of Huangjin Tianyue and Zhongnan Smelting, trading resumes on January 26.

:

On Friday, the operating center of SHFE lead moved up WoW from Thursday. Suppliers actively offered and sold goods, mainly consisting of primary lead smelter cargoes self-picked up from the production site. Quotations from mainstream producing areas against the SMM #1 lead average price were at discounts of 50-0 yuan/mt ex-works. Meanwhile, secondary lead smelters still had divergent selling strategies, with some maintaining low prices for non-tax-included goods, while the discounts for tax-included goods narrowed. Secondary refined lead quotations against the SMM #1 lead average price were at discounts of 120-50 yuan/mt ex-works. Downstream enterprises' risk aversion sentiment relatively eased. As the weekend approached, some enterprises made just-in-time procurement, and transactions remained scattered.

Inventory: On January 23, LME lead inventory increased by 3,250 mt to 215,175 mt. As of January 22, SMM lead ingot social inventory across five regions maintained an upward trend, refreshing a nearly two-month high.

Today's lead price forecast:

After lead prices fell below the 17,000 yuan/mt mark last week, secondary lead profits turned from positive to negative, prompting some secondary lead enterprises to plan early maintenance or holidays, leading to a relative narrowing on the supply side. Meanwhile, primary lead enterprises resumed operations after maintenance, largely offsetting the overall supply changes. Furthermore, with less than a month to go before the Chinese New Year, subsequent attention needs to be paid to downstream enterprises' expectations for pre-holiday stockpiling. 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, warranting vigilance against further downside risks for lead prices.

Data Source Statement: Except for publicly available information, all 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.