SMM January 27:
The most-traded SHFE lead 2603 contract opened at 17,020 yuan/mt today. At the beginning of the session, a large amount of long funds withdrew, causing the contract to break below the key 17,000 yuan/mt level. Although it rebounded above 17,000 yuan/mt after hitting a low, it continued to decline due to pressure from the spot market. After touching a low of 16,945 yuan/mt near the close, it saw a slight rebound and once again stood above 17,000 yuan/mt. It finally closed at 17,000 yuan/mt, down 135 yuan/mt or 0.79%, marking a third consecutive day of decline, with the KDJ line narrowing.
As lead prices continued to fall, primary lead smelters widened their discounts to boost cash flow, while secondary lead smelters saw reduced sales enthusiasm as losses exceeded 200 yuan/mt per lead ingot, resulting in fewer offers in the market. In particular, offers for waste lead-acid batteries, the raw material for secondary lead, remained high, prompting some secondary lead smelters to gradually cut or halt production to control losses. Although downstream small and medium-sized battery enterprises were expected to stockpile at low prices, demand was limited, and lead prices were expected to have further downside room in the short term.
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