The Atmosphere of Chinese New Year Begins to Emerge Domestically; Next Week's Lead Prices Focus on Final Stockpiling and Macro Trends [SMM Weekly Lead Market Forecast]

SMM, January 10: Next week, the key macroeconomic data will include the US December unadjusted YoY CPI, US December MoM retail sales, China's December YoY total retail sales of consumer goods, and China's December YoY industrial output above designated size. Additionally, the US Fed will release the Beige Book on economic conditions, and with one week remaining before the inauguration of the new US president, the market may continue to focus on the risks of changes in tariff policies. LME lead: With the holiday factors in overseas markets resolved, post-holiday LME lead inventory saw an expanded decline. As of January 9, lead inventory dropped by 10,500 mt WoW to 227,600 mt. Meanwhile, the LME cash-3M contango narrowed to -$25.74/mt. Although a stronger US dollar and expectations of changes in US tariff policies continue to weigh on lead prices, improving fundamentals may support a rebound in lead prices. LME lead is expected to trade within the range of $1,925-2,000/mt. Domestic SHFE lead: Recently, environmental protection-driven production restrictions on secondary lead smelters have been lifted, increasing the availability of spot supply. However, pre-Chinese New Year stocking demand from downstream sectors has been limited, leading to relatively slow destocking of lead ingots. Spot premiums in major regions have declined, with some areas dropping to parity (against SMM #1 lead or the SHFE lead 2502 contract). Additionally, the earliest batch of downstream enterprises planning to take holidays will begin suspending operations next week, leading to a gradual weakening in lead consumption. Combined with logistics halts, spot trading is expected to turn sluggish, and lead prices are likely to continue fluctuating downward. The most-traded SHFE lead contract is expected to trade within the range of 16,300-16,800 yuan/mt next week. Spot price forecast: 16,450-16,750 yuan/mt. Supply side: Primary lead producers will continue maintenance, resulting in limited spot market supply, and the decline in spot premiums is expected to be limited. For secondary lead producers, both resumption and maintenance coexist, with production in major regions increasing. Due to cost factors, secondary lead is mostly sold at premiums. Demand side: Considering logistics and holiday factors, next week will be the final week for pre-holiday procurement by downstream enterprises, with attention on the last wave of stocking demand.

SMM

The Atmosphere of Chinese New Year Begins to Emerge Domestically; Next Week's Lead Prices Focus on Final Stockpiling and Macro Trends [SMM Weekly Lead Market Forecast]

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