Domestic Ingot Supply Remains Tight, Lead Prices May Rebound After Hitting Lows [SMM Lead Morning Meeting Summary]

Futures Market:

Last Friday, LME lead opened at $1,956/mt. During the Asian trading session, the market saw sluggish trading, with LME lead fluctuating mostly between $1,965-1,975/mt. Entering the European session, the US dollar index fell consecutively, while LME lead inventory dropped by nearly 3,000 mt to the lowest level in a month. LME lead then fluctuated upward, reaching a high of $1,990/mt and finally closing at $1,981/mt, up 0.41%.

Last Friday, the most-traded SHFE lead 2502 contract opened at 17,445 yuan/mt. With lead ingot destocking and refinery resumption expectations coexisting, the market saw a tug-of-war between bulls and bears, with SHFE lead mostly trading between 17,375-17,425 yuan/mt before finally closing at 17,405 yuan/mt, up 0.29%. Its open interest stood at 60,941 lots, down 70 lots from the previous trading day.

》Click to View SMM Lead Spot Historical Prices

Spot Market Fundamentals :

Last Friday in the lead spot market, SHFE lead remained in a weak downward fluctuation. Due to production cuts on the supply side, spot market circulation was limited, and suppliers stood firm on quotes. Spot discounts (against the SHFE lead 2501 contract) gradually narrowed, with some even quoting at premiums. Secondary lead was quoted ex-factory on par with the SMM 1# lead average price, while downstream enterprises made low-price purchases as needed, with some rigid demand shifting to secondary lead. In the primary lead market, refinery inventories were limited, and most suppliers stood firm on quotes. Spot orders were quoted at premiums of 100-260 yuan/mt against the SMM 1# lead average price ex-factory. In mainstream trade markets such as Jiangsu, Zhejiang, and Shanghai, domestic lead mainstream quotations were on par with the SHFE lead 2501 contract. For secondary refined lead, refinery recovery post-environmental protection measures was slow, and market circulation was limited. Secondary refined lead was quoted ex-factory at discounts of 75 yuan/mt to premiums of 75 yuan/mt against the SMM 1# lead average price.

》Click to View SMM Metal Industry Chain Database

Lead Price Forecast for Today:

Macro side, China's December LPR remained unchanged for two consecutive months. The industry expects stronger monetary policy adjustments next year, with room for further RRR cuts and interest rate cuts. Several US Fed officials support data-dependent and cautious rate cuts next year. Powell's "dovish ally" Daly made a rare hawkish statement, while the ultra-dove Goolsbee expects "considerable" room for rate cuts over the next year. The US Congress passed a short-term spending bill at the last minute with a large majority, avoiding a government shutdown and excluding the debt ceiling content advocated by Trump.

Fundamentals side, frequent environmental protection impacts in regions such as Henan, Anhui, and Hunan have affected lead ingot production and transportation to varying degrees, tightening regional supply and pushing spot premiums higher. However, futures trading was weighed down by factors such as the lifting of smog in Anhui and lead ingot import expectations. Moving forward, we need to pay closer attention to lead ingot destocking trends.