Futures:
Overnight, the LME lead 3M contract opened at $1,905/mt on September 1, trading in a range of $1,902-1,920/mt throughout the day. It consolidated between $1,905/mt and $1,912/mt during Asian trading hours, drifted lower during European trading hours to a low of $1,902/mt, then shot up rapidly after the overlapping European and US sessions began, touching a high of $1,920/mt. It retreated from highs near the close and finally settled at $1,915/mt, up $10/mt from the previous trading day's closing price, a gain of 0.52%. Trading volume was 7,508 lots, with open interest at 172,264 lots.
Overnight, the SHFE lead 2610 contract stopped falling and stabilized in the night session, rebounding slightly. It opened at 16,160 yuan/mt, briefly dipped to 16,115 yuan/mt after the open, then consolidated higher. After 23:00, it shot up to 16,235 yuan/mt, then pulled back slightly from highs, finally settling at 16,185 yuan/mt, up 25 yuan/mt from the previous trading day's closing price, a gain of 0.15%, recording a small bullish candlestick. Night session trading volume was 27,369 lots, with open interest at 65,629 lots.
On the macro front:
The US-Iran conflict escalated sharply: US forces struck Iranian airports and multiple locations along the Strait of Hormuz coast, and two supertankers were hit by shells in the strait. US Treasury Secretary Bessent said sanctions on Iran would continue to be intensified. Crude oil surged more than 4%, with WTI closing up 4.65% at $89.37/bbl and Brent closing up 4.51% at $94.41/bbl. Russia lowered its 2026 oil production expectations to the lowest level in 17 years. Monetary policy leaned hawkish, as US Fed Governor Barkin said rates should be raised decisively if inflation does not cool, and eurozone inflation returning above 3% reinforced rate hike expectations. The US dollar index strengthened, closing up 0.24% at 99.65. The 10-year US Treasury yield rose above 4.8%, and the 10-year Japanese government bond yield rose above 3% for the first time in 30 years.
President Xi Jinping attended the "Shanghai Cooperation Organization Plus" meeting and delivered an important speech. Premier Li Qiang met with a delegation from the US-China Business Council board of directors, as China-US economic and trade communication continued. Three government departments issued the "Guidelines for Compliance Construction and Overseas Competition Conduct in the Automotive Industry." Most of China's three major A-share indices closed lower, with minor metals, memory chips, and other sectors leading declines. Hong Kong stocks weakened in copper mines, batteries, NEV manufacturers, and other sectors.
Today, key data to watch include US August ADP employment at 20:15, US July factory orders at 22:00, EIA crude oil inventories at 22:30, and the US Fed Beige Book in the early hours of the following day.
Spot fundamentals:
Yesterday, SMM #1 lead prices fell by 100 yuan/mt, and SHFE lead reversed course and weakened. For primary lead, after lead prices pulled back, suppliers held prices firm, regional supply was tight, and a few smelters suspended quotations. Cargoes self-picked up from production sites increased slightly WoW. Mainstream production areas quoted premiums of 0-50 yuan/mt over the SMM #1 lead average price on an EXW basis. Secondary lead side, smelters generally sold at discounts, with secondary refined lead discounts narrowing to 100-50 yuan/mt ex-works, and a few regions held prices firm to premiums of 0-50 yuan/mt. Downstream side, enterprises maintained cautious purchasing as needed, with some showing improved inquiry interest while others remained on the sidelines. Combined with increased supply from secondary lead and imported lead diverting demand, overall transactions were average with no significant improvement yet.
Inventory side: As of September 1, LME lead inventory stood at 404,675 mt, down 1,575 mt from the previous trading day; SHFE lead ingot warrant inventory totaled 57,793 mt, up 150 mt from the previous trading day.
Today's lead price forecast:
Overnight LME lead gains drove SHFE lead to stop falling and stabilize. Coupled with continued LME destocking, domestic spot suppliers holding prices firm, and tight regional supply, support formed below lead prices. However, macro headwinds such as a stronger US dollar and rate hike expectations transmitted through financial markets capped LME rebound room. Combined with domestic spot downstream purchasing as needed and diversion from secondary and imported lead, spot follow-through momentum was insufficient. Today's spot lead price is expected to stop falling and stabilize, moving sideways, with attention needed on LME trends and spot transaction follow-through.
![LME lead resumed trading and closed up 0.52%, SHFE lead stopped falling and stabilized, recording a small bullish candlestick [SMM Lead Morning News]](https://imgqn.smm.cn/usercenter/XMxKT20251217171720.jpeg)
