Futures Market:
Yesterday, due to the Christmas holiday, multiple exchanges in the European and US markets were closed, and the LME remained closed. Additionally, the LME resumes normal trading today.
Overnight, the most-traded SHFE lead 2502 contract opened at 17,335 yuan/mt. Environmental protection measures impacted trading activity, causing SHFE lead to fluctuate downward, briefly dipping to 17,260 yuan/mt, marking a new low for the past month. In the latter half of the session, trading between longs and shorts became relatively stagnant, with SHFE lead consolidating around 17,300 yuan/mt for an extended period, eventually closing at 17,275 yuan/mt, down 0.58%. Its open interest reached 55,385 lots, an increase of 641 lots compared to the previous trading day.
》Click to View SMM Lead Spot Historical Prices
Yesterday in the lead spot market, frequent environmental protection incidents in the domestic market had a greater impact on supply than on consumption. After the SHFE lead opened in the morning, it fluctuated upward. At year-end, suppliers held limited inventories, with a few firm quotations. During this period, some refinery cargoes self-picked up from production sites saw premiums raised again. Downstream enterprises adopted a wait-and-see approach with limited purchases, favoring secondary lead with relatively lower prices for urgent needs. In terms of primary lead, year-end refinery shipments further decreased, with a few spot orders quoted at premiums of 50-300 yuan/mt against the SMM 1# lead average price on an ex-factory basis. In mainstream trade markets such as Jiangsu, Zhejiang, and Shanghai, mainstream quotations for domestic lead were at premiums of 0-10 yuan/mt against the SHFE lead 2501 contract. For secondary lead, environmental protection measures continued to have an impact, with limited refinery inventories. Secondary refined lead was quoted at discounts of 50 yuan/mt to premiums of 50 yuan/mt against the SMM 1# lead average price on an ex-factory basis.
Inventory: According to the SMM survey, as of December 26, total social inventories of lead ingots in five regions tracked by SMM stood at 53,800 mt, down 4,600 mt from December 19 and 2,400 mt from December 23.
》Click to View SMM Metal Industry Chain Database
Lead Price Forecast for Today:
Macro Perspective: The results of China's Fifth National Economic Census were released. The census showed that at the end of 2023, there were 33.27 million legal entities engaged in secondary and tertiary industry activities nationwide, an increase of 52.7% compared to the end of 2018. The number of employees reached 428.984 million, up 11.9%, while there were 87.995 million individual businesses employing 179.564 million people.
Fundamentals: Currently, lead ingot supply is constrained by environmental protection measures and vehicle transportation restrictions, increasing the limitations for downstream enterprises in procuring lead ingots. Some enterprises have turned to sourcing from social warehouses, and lead ingot social inventories continue to decline. Additionally, air pollution in regions such as Hebei, Henan, and Shandong is gradually easing, with Shandong already lifting smog restrictions and Henan expected to follow soon. After the New Year holiday next week, attention should be paid to the potential resumption of lead smelting enterprises in Hunan, as well as the lifting of year-end account settlements and inventory checks, which may lead to a recovery in regular procurement by downstream enterprises and boost consumption expectations.
