Futures:
Overnight, LME lead opened at $1,968.5/mt. With limited fundamental support, LME lead fluctuated downward throughout the day, gradually approaching the $1,950/mt level, and finally closed at $1,954/mt, down 0.66%.
Overnight, the most-traded SHFE lead 2603 contract opened at 16,540 yuan/mt. At the beginning of the session, SHFE lead attempted to stabilize above 16,600 yuan/mt, but influenced by the inventory buildup of lead ingots, its price center shifted downward day by day, continuously testing the support at the 16,500 yuan/mt level. It finally closed at 16,580 yuan/mt, up 0.15%. Open interest decreased by 845 lots to 53,863 lots compared to the previous trading day.
On the Macro Front:
US JOLTS job openings in December hit a more than five-year low, significantly below expectations. US Challenger job cuts in January totaled 108,000, the highest for the same period since 2009, surging 205% MoM. ECB President Lagarde stated that inflation is harder to predict than usual. Against the backdrop of a stronger euro and the shadow of tariffs, the ECB held rates steady for the fifth consecutive time. Additionally, CME issued a notice on February 5 local time, adjusting the outright rates (margins) for some futures contracts including gold, silver, and aluminum. The new margin requirement for gold was raised to 9%, and for silver to 18%.
:
In the lead spot market yesterday, lead prices were in the doldrums. Suppliers sold goods following the market trend, and their quotations showed little change from the previous day. Mainstream origin quotations were at discounts of 50 yuan/mt to premiums of 50 yuan/mt against the SMM #1 lead average price ex-works. In the secondary lead sector, continuous losses led to a significant decline in smelters' quoting enthusiasm, resulting in scarce market offers. Quotations for secondary refined lead in a few regions were at premiums of 50-100 yuan/mt against the SMM #1 lead average price ex-works, indicating an inverted price spread between primary lead and secondary lead. As the Chinese New Year break approaches, some downstream enterprises have suspended purchases, waiting for the holiday, while others purchased on dips, albeit with extensive price negotiations. Spot transactions showed relatively improved regional performance.
Inventory: As of February 4, LME lead inventory remained flat compared to the previous trading day, staying at 232,850 mt. SMM social inventories of lead ingots across five regions continued their upward trend, reaching a 4.5-month high.
Today's Lead Price Forecast:
As the Chinese New Year holiday approaches, migrant workers have begun returning to their hometowns. This week, production workshops in some small and medium-sized lead-acid battery enterprises have gradually halted operations, leading to a further decline in demand for lead ingots, which will continue to pressure lead prices to trade in the doldrums. Meanwhile, as smelters and traders actively clear stocks, spot transactions are generally conducted at discounts. Some downstream enterprises are purchasing on dips. Lead ingot inventories at smelters are gradually being digested (transferred to downstream). Concurrently, lead smelters in regions like Hunan and Yunnan are successively undergoing maintenance or halting for the holiday, leading to a tightening of lead ingot supply. The pressure from lead ingot inventory buildup is expected to ease temporarily.
Data Source Statement: Except for publicly available information, all other data are processed by SMM based on public information, market communication, and the SMM internal database model, and are for reference only, not constituting decision-making advice.
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