SHFE Lead Sees Underlying Support, Spot Market Trading Activity in Focus [SMM Lead Morning News]

SMM January 29:

Overnight, LME lead opened at $2,027.5/mt, fluctuating rangebound along the daily average during the Asian session. Entering the European session, the fluctuating trend continued and widened to a range of $2,016-2,036/mt. It finally closed at $2,027/mt, down $1/mt or 0.05%, forming a small bearish candlestick.

Overnight, the most-traded SHFE lead 2603 contract opened at 17,000 yuan/mt. After briefly weakening at the start of the session, it quickly climbed above the 17,000 yuan level and fluctuated, reaching a high of 17,055 yuan/mt before declining again, giving back some of its gains. It finally closed at 17,010 yuan/mt, up 15 yuan/mt or 0.09%, ending a four-day losing streak and forming a small bullish candlestick, with the KDJ lines converging.

Environmental protection-related controls have been reinstated in regions such as central and east China, leading some lead smelters to implement 30% production cuts, with individual enterprises halting operations for the holiday. Due to tight supply in the scrap battery market, the impact on raw material arrivals is not significant. Currently, major downstream battery producers are facing high finished product inventory pressure, while small and medium-sized battery enterprises are only making sporadic purchases of lead ingots, resulting in overall mediocre stockpiling enthusiasm ahead of the holiday. Regional tightening on the supply side will alleviate the pressure from the ongoing inventory buildup of lead ingots. As the Chinese New Year holiday approaches, be cautious of the bearish sentiment on lead prices being amplified by the dual decline in supply and demand.

Data Source Statement: Data not from public information is processed by SMM based on public information, market communication, and SMM's internal database model, and is for reference only, not constituting decision-making advice.