Accident at Ex-China Lead Smelter May Boost Lead Prices in the Short Term [SMM Lead Morning Meeting Minutes]

Futures:

Overnight, LME lead opened at $1,948/mt. During the Asian session, LME lead continued the previous day's consolidation, fluctuating around $1,950/mt. Entering the European session, LME lead gradually fluctuated upward, further driven by an ex-China lead smelter accident, reaching an intraday high of $1,973.5/mt. Toward the close, LME lead ultimately settled at $1,972.5/mt, up 1.13%.

Overnight, SHFE lead in China was closed for the Labour Day holiday and will resume normal trading today.

On the macro front:

The US Secretary of Defense stated that the ceasefire had not ended, that the "freedom plan" in the Strait of Hormuz was a temporary mission not seeking engagement, and that Trump did not need to seek congressional approval to continue military operations against Iran. The US military stated that Iran's attack did not reach the threshold for resuming large-scale combat operations. Trump refused to clearly answer what actions would violate the ceasefire. Iraq offered its largest discount in history: a $33/barrel concession, but buyers must traverse the "perilous" Strait of Hormuz to pick up goods. Saudi Arabia cut the official selling price of Arab Light crude oil to Asia for June, pulling back from record highs. The US April services PMI fell short of expectations, coupled with elevated price pressures, intensifying stagflation concerns. US March job openings edged down to 6.87 million, while hiring activity rebounded.

:

Last Friday in the lead spot market, SHFE lead broke away from the consolidation of previous days and reversed to pull back. Meanwhile, with the Labour Day holiday approaching, some suppliers suspended operations for the holiday, and there were almost no quotes in the Jiangsu, Zhejiang, Shanghai region. Other suppliers continued to offer primary lead cargoes self-picked up from production site, with quoted discounts lowered from the previous day. Mainstream production areas quoted at premiums of 0-30 yuan/mt against SMM #1 lead, ex-works, while a few regions maintained quotes at a premium of 100 yuan/mt. Secondary lead side, smelter quotes were scarce, with secondary refined lead quoted at discounts of 30-0 yuan/mt against SMM #1 lead average price, ex-works, with individual quotes reaching a premium of 75 yuan/mt ex-works. Downstream enterprises mostly suspended purchases, with only a small amount of just-needed buying on dips, and spot order market trading was thin on both sides.

Inventory: As of May 5, LME lead inventory stood at 268,500 mt, unchanged from the previous business day. As of April 30, SHFE lead ingot inventory totaled 61,049 mt, an increase of 1,306 mt from the previous week. SMM lead ingot social inventory showed an upward trend.

Today's Lead Price Forecast:

During the Labour Day holiday, downstream enterprises in China were on concentrated leave. Meanwhile, lead smelter maintenance or production shutdowns increased from April to May, and both supply and demand for lead ingots in May are expected to decline. In the short term, lead consumption in China is seasonally absent, and combined with a new round of delivery factors in May, the risk of lead ingot inventory buildup after the holiday is expected to be significant. In addition, a safety accident occurred at a large lead-zinc smelter outside China yesterday, creating uncertainty over subsequent lead ingot supply, and China's lead prices may be supported by this today.

Data Source Disclaimer: Data other than public information is derived from public information, market communication, and SMM's internal database models, processed by SMM for reference only and does not constitute decision-making advice.