Futures:
Overnight, the LME lead 3M contract opened at $1,900.5/mt on August 24, drifted higher during the Asian session, then quickly declined in the European session, before accelerating upward in late trading to finally close at $1,910.5/mt. The trading range for the session was $1,893.5-1,913.5/mt, with a fluctuation of $20/mt, up $9.5/mt from the previous trading day, a gain of 0.50%. Full-day trading volume was 7,563 lots, with open interest at 174,207 lots.
Overnight, the SHFE lead 2610 contract opened at 16,140 yuan/mt, briefly shot up to 16,165 yuan/mt after opening, then quickly declined to a low of 16,025 yuan/mt, before recovering to move sideways in the 16,050-16,085 yuan/mt range, finally closing at 16,085 yuan/mt, down 45 yuan/mt from the previous trading day's closing price, a decline of 0.28%. Night session trading volume was 30,895 lots, with open interest at 76,852 lots. On the technical front, the upper rail of the Bollinger Bands showed significant pressure, and the MACD red bars shortened, indicating short-term adjustment pressure.
On the macro front:
The US-Iran conflict continues to escalate, with the US Treasury Department announcing an expansion of secondary sanctions targeting entities and countries worldwide that maintain commercial dealings with Iran, covering digital assets, technology, gold, aviation, and shipping. Iran warned that vessels violating transit rules through the Strait of Hormuz would face investigations, and the Houthi militia again attacked a Saudi oil tanker. The US Treasury repurchase plan drew attention, with Treasury Secretary Bessent reportedly eyeing the nearly $1 trillion Fiscal General Account, with September 9 as the operation window. Trump announced that from January 1 next year, tariffs on Canadian automobiles and steel will be raised to 50%, with global trade frictions persisting.
In China, the central bank increased liquidity injection efforts, planning to conduct overnight reverse repo operations from August 27 to September 1 (daily limit not exceeding 600 billion yuan), and conducted a 500-billion-yuan one-year MLF operation today to maintain reasonable and ample liquidity in the banking system. Wang Huning met with the US representatives of the third US-China 1.5-track dialogue, and China-US communication continues to advance. Shanghai is promoting core industries such as high-performance computing chips and general-purpose processors to reach internationally advanced levels. The new housing provident fund policy advanced, raising the maximum loan amount for first homes to 3.4 million yuan, benefiting post-real estate cycle consumption.
Spot Fundamentals:
Yesterday, SHFE lead once surged to 16,240 yuan/mt during the session, and SMM #1 lead price rose by 100 yuan/mt. Primary lead suppliers showed divergent attitudes toward shipments, with limited circulating cargo in the market; some held prices firm while others followed the market. EXW cargoes of primary lead were tight in the north but loose in the south, with low inventory in Henan and Jiangxi and no spot orders available; Hunan held prices firm, while Anhui offered premiums of 150 yuan/mt. Secondary lead smelters mostly sell at market, with a few continuing to hold prices firm. The quotation range for secondary refined lead narrows to a discount of 100 yuan/mt to a premium of 50 yuan/mt. Downstream, with lead prices high, enterprises become cautious in procurement, with many adopting a wait-and-see approach, either waiting for new month's long-term contracts or purchasing cargo in advance. Spot order inquiries are few; coupled with inflows of imported lead, some downstream players shift their focus to imported lead, resulting in sluggish spot transactions and weak deals at high prices.
Inventory wise: As of August 24, total SMM lead ingot social inventory in five locations stood at 74,700 mt, down 3,900 mt from August 17 and down 1,000 mt from August 21. LME lead inventory was 415,800 mt, down 1,050 mt from the previous trading day. SHFE lead ingot warrant inventory totaled 57,016 mt, down 4,687 mt from the previous trading day.
Lead price forecast today:
In the short term, increased maintenance at primary lead smelters and tighter spot market circulating cargo, along with domestic warrant destocking, provide support to the downside of lead prices. However, insufficient demand follow-up and diversion from imported lead, coupled with the pullback in SHFE lead night session, limit upside room. It is expected that spot lead prices will relatively pull back today. Attention should be paid to downstream procurement trends and changes in other supply sides such as imported lead.
![LME lead rallied at the end and closed up 0.5%, SHFE lead consolidated on a subdued note during night session and closed down 0.28% [SMM Lead Morning News]](https://imgqn.smm.cn/usercenter/hrxHx20251217171721.jpeg)
