Futures:
Overnight, the LME lead 3M contract opened at $1,896.0/mt on September 14, dipped to an intraday low of $1,866.0/mt during European trading hours, rebounded to around $1,883/mt in late trading, and finally closed at $1,880.0/mt, down $12.5/mt or 0.66% from the previous trading day's closing price. The full-day trading range was $1,866.0-1,897.0/mt, with volume of 9,724 lots and open interest of 175,480 lots. The daily candlestick formed a large bearish candle with a lower shadow.
Overnight, the SHFE lead 2610 contract opened at 15,825 yuan/mt in the night session, dipped to 15,795 yuan/mt shortly after the open, then consolidated and stabilized, rising to around 15,850 yuan/mt to consolidate at highs, and finally closed at 15,840 yuan/mt, edging up 15 yuan/mt or 0.09% from the previous trading day's closing price. Night session volume was 23,816 lots, with open interest of 65,199 lots, up 1,212 lots. The daily candlestick formed a small bullish candle with a lower shadow.
Notably, the SHFE lead 2609 contract entered its last trading day today, with delivery on September 16-17. Funds accelerated position rollover to deferred months, with open interest in the SHFE lead 2611 contract rising to 58,000 lots. Attention should be paid to the contract rollover of the most-traded contract.
On the macro front:
Overseas, on Monday, boosted by both risk-off sentiment and expectations of rising interest rates, the US dollar index surged, closing up 0.39% at 99.483, its largest single-day gain since the Jackson Hole meeting. The benchmark 10-year Treasury yield broke above 5% intraday for the first time in nearly three years, closing at 4.991%, while the 2-year yield closed at 4.671%. With the US Fed's FOMC meeting approaching, rising energy prices further intensified inflation and rate hike concerns: affected by the attack on Saudi Arabia's east-west crude pipeline, which will be largely offline for several weeks, international oil prices opened higher with a gap. WTI crude broke above $100/barrel intraday, closing up 1.44% at $98.01. Geopolitically, the Middle East situation remained volatile. The US said it was in "direct talks" with the Houthis, Trump said Iran wanted to reach a deal quickly but was refuted by Iranian media, the Houthis attacked a Saudi airbase again, Iran will hold large-scale military exercises, Saudi Arabia sought to increase oil supply through the Strait of Hormuz, and the US Department of Energy (DOE) said it would begin replenishing the Strategic Petroleum Reserve in the coming months. Russia and Ukraine expressed willingness to mutually halt strikes on each other's energy facilities. Today, focus on US August ADP employment at 20:15, US September New York Fed manufacturing index at 20:30, and this week's US Fed FOMC rate decision.
In China, the China Securities Regulatory Commission issued the Measures for the Supervision and Administration of Futures Companies. The central bank announced a 500 billion yuan, 6-month outright reverse repo operation today to support medium and long-term liquidity. The Ministry of Industry and Information Technology (MIIT) held a symposium on industrial economic performance in some provinces, emphasizing that promoting stable industrial economic performance should be placed in a more important position. The central bank, CSRC, State Administration for Market Regulation, and other departments spoke out on payment terms, and the Ministry of Commerce and seven other departments issued the Action Plan for Promoting Smart Home Consumption. At end-August, M2 balance was 356.81 trillion yuan, up 7.5% YoY. In the first eight months, cumulative aggregate financing to the real economy increased by 23.91 trillion yuan, 2.64 trillion yuan less than the same period last year. Today at 10:00, August total retail sales of consumer goods and industrial value added above designated size will be released, and the State Council Information Office will hold a press conference on national economic performance. Attention can be paid to demand-side data for guidance on downstream consumption in the nonferrous metals sector.
Spot fundamentals:
Yesterday, the SMM #1 lead price fell by 200 yuan/mt, with SHFE lead center moving lower and the nonferrous metals sector broadly weakening. For primary lead, spot circulating cargoes were limited, suppliers had tight availability for current-month delivery and generally held prices firm when selling, primary lead smelter EXW quotes were firm, and mainstream production areas offered at premiums of 0-100 yuan/mt against the SMM #1 lead average price. Regional divergence emerged: Henan focused on long-term contract deliveries with limited circulating cargoes, and the discount against the SHFE lead 2610 contract narrowed to 40-30 yuan/mt, with some suppliers nearly sold out of spot cargoes for the month. Hunan smelters held back from selling at low prices and reduced quotes, with spot orders at premiums of 25-100 yuan/mt against the SMM #1 lead average price. Jiangxi and Anhui maintained premiums of 80-100 yuan/mt. For secondary lead, regional supply tightened, secondary lead smelters held back from selling at low prices and market quotes decreased, and mainstream production areas shifted secondary refined lead from discounts to premiums of 0-50 yuan/mt against the SMM #1 lead average price. On the downstream side, after the sharp drop in lead prices, enterprises increased inquiries and showed strong enthusiasm for purchasing as needed at lower prices, favoring primary lead EXW cargoes. Spot transactions improved overall, showing regional divergence with firm prices and better deals in the north, while southern smelters held back from selling at low prices or sold at high premiums, resulting in weaker transactions than in the north.
Inventory: As of September 14, total social inventory of lead ingots across five regions tracked by SMM reached 73,600 mt, down 1,100 mt from September 7 and down 500 mt from September 10. LME lead inventory stood at 378,525 mt, down 1,500 mt from the previous trading day. SHFE lead warrant inventory totaled 60,397 mt, up 644 mt from the previous trading day.
Lead price forecast for today:
Overnight, SHFE lead rebounded slightly in the night session but still closed below the 16,000 mark. After the sharp decline in the previous trading day, the KDJ indicator has entered the oversold territory at low levels, and the decline has slowed somewhat, but the overall weak pattern remains unchanged. On the spot side, smelters held prices firm and held back from selling, secondary refined lead shifted to premiums, and downstream restocked at lower prices. Combined with declines in both domestic social inventory and LME inventory, this provides some support below lead prices. Today's spot lead price is expected to consolidate on a subdued note at low levels, potentially stabilizing gradually after the decline slows, with limited overall upside and downside room.
![LME lead closed down 0.66%, SHFE lead dipped and rebounded to hold 15,800 yuan/mt [SMM Lead Morning News]](https://imgqn.smm.cn/usercenter/guTSZ20251217171722.jpg)
