Jin Tou Wang·2026-01-04 06:05News Summary Core Viewpoint - The lead market in 2026 is expected to experience a supply surplus and weak demand, leading to price fluctuations within a range of 16,000 to 18,000 yuan per ton. Seasonal factors may create temporary supply-demand gaps that could elevate prices [4]. Group 1: Market Inventory and Production - As of December 26, 2025, Shanghai lead futures inventory decreased by 780 tons to 27,095 tons [1]. - On January 2, 2026, the London Metal Exchange (LME) reported registered lead warrants of 162,500 tons, with canceled warrants down by 6,025 tons to 76,825 tons, and total lead inventory reduced by 2,600 tons to 239,325 tons [1]. - A medium-sized recycled lead smelting enterprise in Southwest China plans to reduce production by 20%-30% in January due to ongoing raw material supply constraints [1]. Group 2: Supply and Demand Dynamics - The supply side is seeing a slight increase in ore and waste battery recovery, with refined lead production continuing to grow [4]. - Demand is supported by policies encouraging replacements, with positive growth in electric two-wheelers and potential increases in energy storage and lead-carbon batteries. However, exports of lead-acid batteries may decline due to high Shanghai-London price ratios, trade frictions, and tariffs in the Middle East [4]. - The overall assessment indicates a slight domestic surplus, with seasonal consumption expected to pressure prices after a minor uptick at the beginning of the year [4]. Group 3: Market Sentiment and Trading Recommendations - Recent reductions in recycled lead production are primarily due to raw material supply issues, compounded by environmental controls in East and North China [4]. - Downstream large manufacturers are experiencing weaker operations, attributed to the end-of-month accounting period, although there remains some buying activity in the spot market [4]. - The terminal demand is showing significant differentiation, with replacement demand affected by new national standards and automotive battery consumption entering a peak season, though the seasonal effect may not match previous years due to competition from lithium alternatives [4]. - Inventory levels are currently fluctuating downwards, with no significant short-term recovery expected, leading to limited upward potential for lead prices. A cautious trading approach is recommended [4].