SMM, September 17:
The SHFE lead 2610 contract opened at 15,890 yuan/mt in the daytime session, dipped briefly to 15,845 yuan/mt in early trading before consolidating higher, accelerated its rise in the afternoon to hit an intraday high of 16,160 yuan/mt, then pulled back slightly from highs near the close to settle at 16,125 yuan/mt, up 255 yuan/mt or 1.61% from the previous trading day's closing price, with volume of 65,774 lots and open interest of 52,065 lots. The daily candlestick recorded a large bullish candle. The daily KDJ formed a golden cross from oversold territory, with the J value rebounding to near 50. After the negative impact of rate hikes was fully priced in, lead prices returned to fundamentals as the trading center. China's spot supply is tight and smelters are holding prices firm, so short-term rebound momentum remains. However, this round of gains was mainly driven by bear position covering and the rollover of the most-traded contract, compounded by downstream battery enterprises showing insufficient purchase willingness to chase higher prices. Most are focusing on drawing down their own inventory, with only some still making just-in-time procurement. Spot transactions have weakened, which may constrain further upside in futures prices. In the short term, SHFE lead is expected to consolidate on a strong note above 16,000 yuan/mt, with limited rebound room. Attention should be paid to volume-price performance after the most-traded contract rollover, as well as the follow-through of spot transactions at high premiums downstream.
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