Spot Lead Ingot Consumption Remains Slow, Widespread Production Cuts and Halts at Secondary Smelters [SMM Lead Morning Meeting Minutes]

Futures:

Overnight, LME lead opened at $2,027/mt. During the Asian session, as the US dollar index fell sharply, LME lead fluctuated upward, reaching a high of $2,060/mt. Entering the European session, it oscillated between $2,040-2060/mt, giving up all gains by the end and continuing to decline, touching a low of $2,005.5/mt, nearly breaking below the $2,000 mark.

It finally closed at $2,011/mt, down $16/mt, or 0.79%. It recorded two consecutive bearish candlesticks. Overnight, the most-traded SHFE lead 2603 contract opened at 17,195 yuan/mt. Initially, driven by the general rise in non-ferrous metals, SHFE lead briefly rose above 17,300 yuan/mt. Later, dragged down by the falling LME lead and weak fundamentals, SHFE lead gave up all its gains and fell below the 17,000 yuan/mt level again. It finally closed at 16,975 yuan/mt, down 210 yuan/mt, or 1.22%, forming a large bearish candlestick.

On the macro front:

Trump: The Fed Chairman will be announced next week, and interest rates should be cut by 2 to 3 percentage points. CME raised the margin requirements for gold, copper, and some aluminum futures. World Gold Council: Global central banks net purchased 230 mt of gold in Q4. Strong gold demand is expected to continue in 2026. Bank of China: Adjusted the parameters for silver deferred contracts, raising the margin ratio from 48.26% to 50.80%. The General Office of the State Council issued the "Work Plan for Accelerating the Cultivation of New Growth Points in Service Consumption." Guotou Silver LOF: Trading suspended from the opening on January 30 until the close.

Yesterday, non-ferrous metals generally rose, and SHFE lead also stopped falling and rebounded, returning to the 17,000 yuan/mt level. Suppliers actively sold goods, especially with the discounts on self-picked-up electrolytic lead cargoes (against the SHFE 2603 contract) expanding, while some smelters narrowed their discount offers. Mainstream origin quotations were -50~-30 yuan/mt against the SMM #1 lead average price. Secondary lead producers followed the market, offering secondary refined lead at -150~-50 yuan/mt against the SMM #1 lead average price. Downstream enterprises mainly made long-term contract purchases, with a small portion making just-in-time procurement. Spot market transactions showed no significant improvement.

Inventory: On January 29, LME lead inventory decreased by 1,500 mt to 207,675 mt. As of January 29, SMM's five-region social inventory of lead ingots continued to increase.

Today's lead price forecast:

Due to poor sales orders, battery producers have low production enthusiasm and currently rely mainly on long-term contract deliveries for raw material procurement, with low willingness for spot orders; some plan to take a holiday around February 10. Due to difficulties in selling spot lead ingots, both primary lead and secondary refined lead were sold at a discount to the SMM #1 lead average price; secondary refined lead sources had no transaction advantage, and smelters experienced widespread production cuts and shutdowns. In summary, be cautious of the drag on lead price trends from the dual decline in supply and demand.

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