Futures Market:
Overnight, LME lead opened at $1,993/mt. During the Asian trading session, LME lead consolidated, fluctuating mainly between $1,990-2,000/mt. Entering the European session, concerns over the US tariff policy escalation caused the center of LME lead to shift downward, with intraday prices dropping to as low as $1,975.5/mt. By the end of the session, LME lead rebounded, closing at $1,997.5/mt, up by 0.38%.
Overnight, the most-traded SHFE lead 2503 contract opened at 17,100 yuan/mt. SHFE lead overall fluctuated upward, and despite weakening during the session due to LME lead's decline, it recovered losses in the latter half of the trading session, trading near 17,200 yuan/mt. It eventually closed at 17,190 yuan/mt, up by 0.17%, with open interest decreasing by 2,463 lots to 40,571 lots compared to the previous trading day.
》Click to View SMM Lead Spot Historical Prices
Macro Perspective: The Chinese State Council Executive Meeting discussed measures to boost consumption, resolve structural imbalances in key industries, and promote foreign investment by stabilizing existing investments and expanding new ones. It also emphasized increasing support for reinvestment by foreign enterprises in China and encouraging foreign equity investments. Meanwhile, former US President Trump signed an executive order imposing a 25% tariff on all steel and aluminum imports to the US.
Yesterday in the lead spot market, SHFE lead continued to consolidate at high levels. Suppliers followed market trends in their sales, with some quotations showing expanded discounts compared to last week. Mainstream smelters in key regions quoted ex-factory prices for cargoes self-picked up from production sites at premiums of 0-100 yuan/mt against the SMM 1# lead average price. Meanwhile, the circulation of secondary lead increased, with secondary refined lead quoted at discounts of 50-0 yuan/mt against the SMM 1# lead average price ex-factory. Downstream enterprises maintained a wait-and-see attitude, though inquiries slightly increased compared to last week. Spot transactions remained sluggish. In the trade market, quotations in Jiangsu, Zhejiang, and Shanghai were at discounts of 30-0 yuan/mt against the SHFE lead 2502 contract or on par with the SHFE lead 2503 contract.
Inventory: As of February 10, LME lead inventory decreased by 350 mt to 221,375 mt. The total social inventory of SMM lead ingots across five regions reached 46,200 mt, up by 6,900 mt compared to January 27 and by 2,700 mt compared to February 6.
》Click to View SMM Metal Industry Chain Database
Lead Price Forecast:
Recently, SHFE lead has been fluctuating upward. However, in the spot market, as downstream enterprises have not fully resumed operations, those that have restarted production continue to consume pre-holiday lead ingot inventories. This has resulted in weak purchase willingness for high-priced lead, with spot lead discounts gradually widening. Mainstream regions' primary lead quotations are at discounts of around 200 yuan/mt against the SHFE lead 2503 contract ex-factory, increasing suppliers' willingness to transfer to delivery warehouses. Additionally, during the Lantern Festival period, downstream enterprises are expected to fully resume operations, and secondary lead enterprises are also expected to resume supply during the same period. With both supply and demand for lead ingots increasing, short-term social inventory is unlikely to reverse its upward trend.
