Bullish and Bearish Fundamental Factors Coexist; Signals Have Emerged That Lead Prices Have Bottomed Out, but Upside Expectations Remain Insufficient [SMM Lead Market Weekly Forecast]

         Next week, due to the Qingming Festival in the Chinese market, SHFE will not conduct night session trading on the evening of April 3; outside China, due to Good Friday, exchanges including the LME will be closed for one day on April 3. In terms of macroeconomic data, key releases are expected to include China’s official manufacturing PMI for March, US ADP employment for March, US retail sales MoM for February, and US ISM manufacturing PMI for March.

LME lead, current geopolitical tensions outside China remained prominent, shipping cycles lengthened, and crude oil prices rose, all of which had a significant impact on the base metal market. For lead, consumption in the Middle East was relatively stagnant, supply chains were disrupted, and transportation cycles for lead ingot and lead-acid batteries lengthened. Meanwhile, China’s lead ingot import arbitrage remained favorable, and overseas lead ingot continued to flow into the Chinese market. This week, LME lead ingot inventory fell by nearly 1 kt, and the LME Cash-3M contango narrowed to -$34.62/mt, providing support for lead prices. LME lead is expected to trade at $1,880-1,930/mt next week.

SHFE lead, lead ingot inventory was destocked, including inventories at lead smelters and social warehouses, and lead prices showed signs of stabilizing after the decline. However, the lead ingot import window is currently open, while lead-acid batteries will enter the traditional off-season in April, limiting expectations for lead consumption. In addition, some secondary lead smelters recently resumed production and raised output, while new maintenance plans are also scheduled for April. With bullish and bearish factors coexisting in fundamentals, lead prices are expected to continue to fluctuate rangebound. If lead smelter maintenance is implemented as planned, lead prices may have a chance to rise relatively. The most-traded SHFE lead contract is expected to trade at 16,300-16,700 yuan/mt next week.

Spot price forecast: 16,250-16,550 yuan/mt. With the traditional off-season for lead-acid batteries approaching in April, downstream enterprises mostly maintained purchasing as needed, with limited procurement enthusiasm. Supply side, both primary lead and secondary lead enterprises saw output increases, and imported lead continued to flow into China, so spot lead premium trading may be difficult to sustain for long.