Futures:
Overnight, the LME lead 3M contract drifted lower on September 2, opening at $1,913.0/mt. The center gradually shifted downward from the European session, and after dipping to an intraday low of $1,891.5/mt near the close, it rebounded slightly to settle at $1,898.5/mt, down $16.5/mt or 0.86% from the previous trading day's closing price. The daily candlestick formed a solid bearish candle, giving back most of the previous day's gains, but still held above the middle Bollinger Band. The full-day trading range was $1,891.5-1,917.5/mt, with volume of 8,133 lots and open interest of 171,519 lots.
Overnight, the SHFE lead 2610 contract followed the LME in the doldrums during the night session, opening at 16,100 yuan/mt. The night session range was 16,075-16,155 yuan/mt, and it ultimately settled at 16,085 yuan/mt, down 70 yuan/mt or 0.43% from the previous trading day's closing price. Volume was 20,115 lots, and open interest was 65,818 lots, up 1,140 lots. The daily candlestick formed a small bearish candle, but the closing price remained above the middle Bollinger Band.
Overnight, LME base metals were mixed, with LME lead down 0.86%, relatively weak within the sector. SHFE and LME pulled back in tandem, but neither effectively broke below the middle Bollinger Band.
On the macro front:
US August "US ADP employment data" came in below expectations. US Fed's Williams said inflation trends are slowly declining and current interest rates are appropriate, while the Beige Book judged the economic outlook as generally positive but with rising uncertainty. Cooling employment combined with dovish remarks eased market expectations for rate hikes. Global monetary policy diverged: the Reserve Bank of New Zealand raised rates by 25 basis points as expected, while the Bank of Canada held rates unchanged at 2.25% for the seventh consecutive meeting. The yen suddenly surged intraday, triggering speculation of intervention by Japanese authorities in the currency market, and the US dollar index fluctuated accordingly. The Middle East situation remains volatile: Trump said he is ready to strike Iran again at any time, but US media reported that his aides prefer to "keep a low profile" for now due to the midterm elections. The Baltic Dry Index (BDI) rose to its highest level since year-end 2023, reflecting a recovery in global commodity shipping demand.
Yesterday, President Xi Jinping met with Egyptian President Sisi in Cairo, proposing to strengthen cooperation in areas such as electric power, green energy, and EVs. PBOC Governor Pan Gongsheng attended the G20 Finance Ministers and Central Bank Governors Meeting. According to the Ministry of Natural Resources, a major breakthrough has been made in the exploration of the Chating copper-gold ore deposit in Xuancheng, Anhui, which is expected to form a new large-scale copper-gold resource base in east China.
Today at 09:45, the August Caixin services and composite PMI will be released. With the official manufacturing PMI having rebounded to 49.8, attention will be on the sustainability of the recovery in the services sector.
Spot fundamentals:
Yesterday, SMM #1 lead prices fell by 25 yuan/mt. Primary lead EXW cargoes were tight, suppliers held prices firm and held back from selling, mainstream production areas quoted premiums of 0-50 yuan/mt, some smelters underwent maintenance, and regional divergence emerged; secondary lead was sold at discounts of 100-50 yuan/mt against SMM #1 lead average price, diverting some demand; downstream users mostly stayed on the sidelines, with slightly more inquiries at lower prices but subdued transactions, mainly under long-term contracts, and overall trading was sluggish.
Inventory: As of September 2, LME lead inventory stood at 399,600 mt, down 5,070 mt from the previous trading day; SHFE lead ingot warrant inventory totaled 57,793 mt, unchanged from the previous trading day.
Lead price forecast for today:
Overnight, LME lead was weak within the sector, and SHFE lead followed with a pullback in the night session, weighing on spot sentiment today; overseas, US Fed officials struck a dovish tone, expectations for rate hikes cooled, and LME lead inventory dropped sharply. In China, primary lead EXW cargoes are tight, suppliers hold prices firm and hold back from selling, providing support below lead prices, while secondary lead discounts divert demand and downstream caution with sluggish transactions limits the rebound.
Spot lead prices are expected to move sideways and consolidate on a subdued note today, with limited room to follow declines, and continued attention is needed on LME sentiment and spot transaction follow-through.
