Ample Supply and Weak Demand Keep Lead Prices on a Fluctuating Trend [SMM Lead Morning Meeting Summary]

Futures:

The LME market was closed from April 3 to April 6 for the Good Friday and Easter holidays; due to the Qingming Festival holiday, SHFE lead did not conduct night session trading on the evening of Friday, April 3; normal trading resumed from Tuesday, April 7.

On the Macro Front:

1. Trump said Iran's bridge power plants could be destroyed within four hours. 2. Trump on strait transit fees: the US might as well collect them. 3. Iranian Foreign Ministry spokesperson: the US rescue operation for pilots may have been aimed at stealing enriched uranium. 4. Vessel traffic through the Strait of Hormuz rose to the highest level since early March. 5. China made a major breakthrough in sodium-ion battery technology. 6. Media: Foxconn was trial-producing Apple's foldable-screen phones.

Spot Fundamentals:

Last Friday, SHFE lead held up well. Suppliers shipped in line with the market, and with the holiday approaching, some suppliers actively made shipments. Premiums for primary lead cargoes self-picked up from production site were lowered, with quotations in major producing areas mostly around parity against the SMM #1 lead average price ex-works, while a small number of regions quoted premiums of 50 yuan/mt. For secondary lead, smelters quoted in line with the market, with secondary refined lead quoted at discounts of 50-0 yuan/mt to premiums of 25 yuan/mt against the SMM #1 lead average price ex-works. However, imported lead continued to flow into China, giving downstream enterprises more choices. Apart from slight stockpiling due to the holiday, other enterprises only purchased as needed.

Inventory: As of April 2, LME lead inventory fell by 50 mt to 281,650 mt; SMM social inventory of lead ingot across five regions continued to pull back.

Lead Price Forecast for Today:

Supply side, although social inventory of lead ingot in five regions in China continued to decline, maintenance and production resumptions at primary lead smelters proceeded in parallel in April. In addition, secondary lead capacity in northern China increased, finished product inventories at plants increased slightly, and imported lead continued to pour in, leaving overall spot supply ample. Demand side, lead-acid batteries entered the traditional off-season, downstream purchase willingness remained cautious, and spot transactions were weak. With phased consumption absent and the risk of post-holiday social inventory buildup elevated, resistance in SHFE lead became more evident. Lead prices are expected to maintain a fluctuating trend, with limited upside room.