Next week, on the macro economic data front, key releases are about to include the US March retail sales month-on-month rate and the final reading of the US April University of Michigan Consumer Sentiment Index. This week, Middle East peace talks experienced twists and turns, with some progress made but significant uncertainties remaining. The impact of the conflict on crude oil supply and logistics chains persisted, including sharp declines in air transport, surging maritime insurance costs, and extended shipping routes. The IMF further revised its forecast, projecting economic growth in the Middle East, North Africa, Afghanistan, and Pakistan region to slow down to 1.4% in 2026.
LME lead side, LME lead inventory showed a continuous declining trend over the past two months, with the decline accelerating in the recent two weeks, supporting lead price increases. Recently, Vietnam conducted environmental protection inspections on lead smelting operations, exacerbating the tightening of lead ingot circulation in the Southeast Asian market, with spot premiums rising. If Middle East developments progress positively, lead prices are expected to see their center shift further upward. LME lead is expected to trade in the range of $1,930-2,000/mt next week.
SHFE lead side, China's lead-acid battery market was in the off-season, and lead ingot inventory rose, serving as a strong bearish factor for lead prices. Recently, secondary lead enterprises saw increased maintenance, and the import window for lead (refined lead) narrowed, with supply relatively tightening, partially offsetting the decline in consumption. Lead prices are expected to continue their volatile trend. The most-traded SHFE lead contract is expected to trade in the range of 16,550-16,950 yuan/mt next week.
Spot price forecast: 16,450-16,700 yuan/mt. Lead consumption side, the off-season trend in the end-use market intensified, with downstream enterprises generally producing based on sales, and lead demand remained weak. Supply side, secondary lead enterprise maintenance and recovery expectations coexisted, and imported crude lead continued to flow in, limiting supply reductions. Additionally, after next week's delivery, supplies will re-enter the market. Spot lead is expected to remain trading at a discount.
