Lead-Acid Battery Market's Pre-Holiday Consumption Performance Was Poor, Providing Limited Support for Lead Prices [SMM Lead Morning Meeting Minutes]

Futures:

Overnight, LME lead opened at $2,034/mt. During the Asian session, it fluctuated below the daily moving average. Entering the European session, pressured by a weaker US dollar index, LME lead climbed to a high of $2,067.5/mt. However, lacking solid support at high levels, it plunged and pulled back, erasing most of its gains. It finally closed at $2,036/mt, up $1/mt or 0.05%, forming a small bullish candlestick with a long upper shadow.

Overnight, the most-traded SHFE lead 2603 contract opened at 17,170 yuan/mt. It briefly rose to a high of 17,165 yuan/mt early in the session, but then fluctuated downward, dragged by the decline in LME lead and weak spot fundamentals. It touched a low of 17,055 yuan/mt towards the end of the session before a slight rebound. The contract finally closed at 17,085 yuan/mt, down 10 yuan/mt or 0.06%, marking two consecutive declining sessions.

On the Macro Front:

OPEC+ representatives indicated that the policy of halting production increases may be maintained in March. Prediction platforms show an approximately 80% probability of a US government shutdown before the end of January. The EU will fully ban imports of Russian liquefied natural gas by January 2027, and fully ban imports of Russian pipeline natural gas by the end of September 2027. Overnight, spot gold, silver, and platinum hit new highs of $5,111/oz, $117.74/oz, and $2,919/oz, respectively, but all three metals fell sharply by the end of the US session. Silver reversed a 14% gain to close lower, and the gold/silver ratio briefly fell below 45. SDIC Silver LOF announced it will suspend subscription services starting January 28. The People's Bank of China held its 2026 macro-prudential work conference, emphasizing forward-looking assessment of systemic financial risks, innovating and enriching the policy toolkit, and maintaining stable financial market operation and overall financial system stability.

:

Yesterday, SHFE lead consolidated. Suppliers quoted prices accordingly. Cargoes of primary lead self-picked up from the production site were quoted at discounts, with mainstream producing areas quoted at discounts of 50-30 yuan/mt against the SMM #1 lead average price ex-works. Downstream enterprises had sluggish demand and poor inquiry enthusiasm. Furthermore, secondary lead smelters saw reduced quotation enthusiasm due to thin profits. Some secondary refined lead was quoted at discounts of 150-50 yuan/mt against the SMM #1 lead average price ex-works. However, downstream purchasers hoped for larger discounts, leading to poor transaction volume in the spot market.

Inventory: On January 26, LME lead inventory decreased by 1,575 mt to 213,600 mt. As of January 26, SMM social inventory of lead ingots across five regions maintained its increasing trend, again reaching a new high in nearly two months.

Today's Lead Price Forecast:

Primary lead side, primary lead enterprises resumed production last week, and supplies re-entered the circulation market after delivery. The situation of spot discount trading is expected to remain difficult to change this week. Secondary lead side, shrinking profits dampened production enthusiasm among smelters, and production cuts have emerged in the relatively northern regions. Discounts for secondary refined lead are expected to be maintained or narrow relatively this week. On the lead consumption side, lead-acid battery market consumption performance before the Chinese New Year was relatively weak, with large enterprises generally maintaining certain inventory levels, while only some small and medium-sized enterprises have begun planning pre-holiday stockpiling, providing limited support for lead prices.

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.