Futures:
Last Friday, the LME lead 3M contract drifted lower on August 28, opening at $1,915.5/mt, moving sideways during Asian trading hours, drifting lower during European and overlapping European-US sessions, edging up slightly near the close, and eventually closing at $1,905.0/mt, down $7.5/mt from the previous trading day, a decline of 0.39%; its full-day range was $1,901.5-1,919.5/mt, with a range of $18/mt, volume of 5,072 lots, and open interest of 175,696 lots.
Last Friday, the SHFE lead 2610 contract drifted higher in the night session, opening at 16,240 yuan/mt, briefly dipping to 16,160 yuan/mt after the open, then rebounding to close at 16,230 yuan/mt, down slightly by 15 yuan/mt from the previous trading day's close, a decline of 0.09%; night session volume was 24,235 lots, open interest was 72,101 lots, and positions increased by 641 lots.
Macro front:
Fed Chairman Warsh made hawkish remarks, saying that inflation must be ensured to ease toward the target, otherwise monetary policy should be used decisively, and advocating that the Fed reduce intervention and allow the market to form the yield curve on its own, suggesting that long-end tightening is preferable to short-end rate hikes. The initial US August nonfarm payrolls came in at -79,000, far below the expected +37,000, intensifying stagflation risks. Middle East tensions escalated again, with Iran saying it hopes to resume shipping through the strait in September and agreeing to a ceasefire plan, while geopolitical conditions remained volatile. Pressured by a stronger US dollar and rate hike expectations, LME copper futures fell 0.4%, spot gold fell below $3,500/oz, and silver dropped 2.72%. The G20 Finance Ministers and Central Bank Governors Meeting takes place today, with monetary policy signals in focus.
Property policy package strengthened: the National Financial Regulatory Administration issued five real estate financing management measures; three government departments advanced sales of completed homes; two departments extended the maximum term for individual housing loans from 30 years to 40 years; the NDRC held a national investment work promotion conference; the growth rate of net profit excluding non-recurring items in the semi-annual reports of publicly listed firms in Shanghai hit a new high since 2022, and corporate earnings improved; President Xi Jinping attended the SCO summit and visited Kyrgyzstan; Wang Yi spoke by phone with the Iranian foreign minister to communicate on the Middle East situation. China's August official manufacturing PMI will be released at 9:30 today and warrants close attention.
Spot fundamentals:
Last Friday, the SMM #1 lead price rose by 125 yuan/mt. In terms of primary lead, suppliers became more willing to sell, but circulating supply was limited and offers held firm, with some suppliers shifting to forward cargoes; the price difference between north and south China narrowed, and mainstream production areas quoted ex-works premiums of 20-50 yuan/mt to the SMM #1 lead average price. In terms of secondary lead, smelters showed greater willingness to sell, with ex-works discounts widening to 125-0 yuan/mt, and discounts in remote areas at 240-200 yuan/mt, while circulating supply in the market increased somewhat. Downstream, wait-and-see sentiment was relatively strong, with purchases mainly via long-term contracts and some for essential demand; transactions turned subdued at high lead prices. Imported lead circulation was relatively ample, but due to low grades, the main purchasers were secondary lead enterprises, while domestic lead transactions were generally muted.
Inventory side: As of August 27, total SMM lead ingot social inventory across five regions reached 69,300 mt, down 6,400 mt from August 20 and down 5,400 mt from August 24. LME lead inventory was 406,250 mt, down 2,250 mt from the previous trading day; SHFE lead ingot warrant inventory totaled 56,940 mt, down 51 mt from the previous trading day.
Today's lead price forecast:
Weekly inventory destocking continued. Primary lead supply was limited, suppliers showed strong willingness to hold prices firm, and support below lead prices was solid; however, suppliers' selling enthusiasm rebounded, secondary lead sellers widened their discounts, and imported lead was loose, resulting in a marginal increase in circulating supply. Combined with lead prices fluctuating at highs recently, downstream wait-and-see sentiment was relatively strong, momentum to rush to buy amid continuous price rise was insufficient, and upside room was limited. The spot lead price is expected to continue moving sideways at highs today. Attention should be paid to manufacturing PMI data, LME trends, and follow-through in spot transactions.
![Lead Consumption Further Weakens, Lead Price Performance Remains Poor [SMM Lead Morning Meeting Minutes]](https://imgqn.smm.cn/usercenter/hrxHx20251217171721.jpeg)
