Futures:
Overnight, the LME lead 3M contract opened at $1,881.0/mt on September 17. After a brief dip at the open, it consolidated higher, climbed steadily during the European session, accelerated its gains in the evening, and consolidated at highs before dawn. It hit an intraday high of $1,913.5/mt and finally closed at $1,911.0/mt, up $29.0/mt or 1.54% from the previous trading day's closing price. The full-day trading range was $1,881.0-1,913.5/mt, with volume of 9,887 lots and open interest of 183,043 lots, up 4,827 lots. The daily candlestick recorded a long bullish candlestick with no lower shadow.
Overnight, the SHFE lead 2610 contract opened at 16,135 yuan/mt in the night session. It shot up quickly after the open, then consolidated firmly at highs between 16,250 and 16,325 yuan/mt. It hit an intraday high of 16,325 yuan/mt and a low of 16,130 yuan/mt, finally closing at 16,320 yuan/mt, up 195 yuan/mt or 1.21% from the September 17 daytime session closing price. Night session volume was 45,484 lots, with open interest of 46,300 lots, down 5,765 lots. The daily candlestick recorded a long bullish candlestick.
In addition, the SHFE lead 2609 contract completed smooth delivery on September 17, with open interest of 4,040 lots and delivery volume of 20,200 mt. Contract rollover in the most-traded contract accelerated, with SHFE lead 2611 open interest at 64,349 lots.
Overall, SHFE and LME continued their synchronized rebound, but the pace and quality diverged: LME lead saw increased open interest and volume as bulls actively entered and reclaimed moving averages, giving the rebound stronger capital support; SHFE lead rose on declining open interest, driven more by short covering and contract rollover, and has approached previous highs and the upper Bollinger Band, with daily KDJ nearing overbought territory. In the short term, LME lead's pattern is relatively strong, while resistance is gradually emerging for SHFE lead. Watch whether SHFE lead can break through previous highs and the upper band on expanding volume, as well as volume-price disruptions during the rollover of the most-traded contract to 2611.
On the macro front:
Overseas, after the US Fed's rate hike landed, market tightening fears eased notably: On Thursday, the US dollar index consolidated above the 100 level, closing down 0.08% at 100.2, snapping a five-session winning streak. As Saudi Arabia was reported to be shipping crude oil via ship-to-ship transfers and planning to restore about half of the capacity of its east-west pipeline within days, coupled with Saudi Arabia's request for Oman to mediate and a proposed two-week ceasefire with the Houthis, supply concerns cooled. WTI crude oil closed down 1.01% at $96.52/barrel, and the pullback in oil prices further eased inflation pressure. In the Middle East, the US has approved the Iranian president and foreign minister to travel to New York for the UN General Assembly, and Trump said he will attend the General Assembly and meet with Gulf state leaders. However, Iran also claimed to have struck an oil tanker flying the Togolese flag, leaving the situation still volatile. Today's focus shifts to the Bank of Japan's rate decision and Governor Kazuo Ueda's press conference, with speeches from US Fed Governors Bowman and Schmid in the evening, as well as US August industrial production and Conference Board leading indicators. Watch for post-hike official comments and changes in sentiment in the US dollar and LME base metals.
In China, Xi Jinping made important instructions on developing advanced manufacturing. On the diplomatic and trade front, Wang Yi held a phone call with US Secretary of State Marco Rubio. The Ministry of Commerce said Chinese and US economic and trade teams are maintaining close communication on issues such as tariff reductions. Commerce Minister Wang Wentao held a video meeting with European Commission Trade and Economic Security Commissioner Maros Sefcovic and responded to the "Europe First" clause in the EC's draft public procurement law.
Spot fundamentals:
Yesterday, the SMM #1 lead price rose by 150 yuan/mt from the previous trading day. For primary lead, spot circulating cargoes were tight, with current-month cargoes particularly scarce. Suppliers generally held prices firm when selling, and premiums in south China rose again. Mainstream-origin primary lead smelters quoted Ex-works at premiums of 0-200 yuan/mt against the SMM #1 lead average price, and deals at high premiums were already seen. Regionally, Henan spot supply was tight, with suppliers mostly selling October cargoes. Spot orders were quoted on par with the SHFE lead 2610 contract and at a discount of 50 yuan/mt against the 2611 contract Ex-works. Deals for next-month cargoes were sluggish. In Hunan, circulating cargoes were limited, and smelter premiums were raised to 200 yuan/mt. In Jiangxi and Anhui, premiums were 100-150 yuan/mt. For secondary lead, production cuts and halts at smelters in major producing areas continued, and regional supply remained tight. Secondary refined lead was also quoted firmly, with mainstream producing areas quoting at premiums of 50-100 yuan/mt against the SMM #1 lead average price Ex-works. On the downstream side, after the sharp rebound in lead prices, battery producers became less active in purchasing. Some turned to the sidelines and mainly digested their own inventories, while only some maintained just-in-time procurement. Spot market transactions weakened.
Inventories: As of September 17, total social inventory of SMM lead ingots across five regions stood at 71,900 mt, down 1,700 mt from September 14 and down 2,200 mt from September 10. LME lead inventory was 375,600 mt, down 2,750 mt from the previous trading day. Total SHFE lead warrant inventory was 59,238 mt, down 481 mt from the previous trading day.
Lead price forecast for today:
Overnight, SHFE and LME rebounded in tandem. The SHFE lead 2610 contract rose another 1.21% in the night session, approaching its previous high. After macro headwinds were fully priced in, trading focus returned to fundamentals. On the spot side, current-month cargoes were tight, and suppliers as well as primary and secondary smelters generally held prices firm, with premiums strengthening and providing support below lead prices. However, it should be noted that the J value of the daily KDJ for SHFE lead is approaching overbought territory. The current rally was mainly driven by concentrated exits of previously bearish positions, coupled with position rollover by the most-traded contract. New buying follow-through was limited, and the futures market may see repeated fluctuations in the short term. Second, on the spot side, the high premiums from suppliers and smelters were mainly concentrated in current-month cargoes. Downstream battery producers were cautious about chasing prices after the sharp rise, mostly staying on the sidelines and digesting inventories. Transactions weakened, limiting upside room for lead prices. Overall, spot lead prices held up well today. Watch for a retreat after a rapid rise in futures near the previous high, with focus on the validity of a breakout above the previous high of SHFE lead and the upper Bollinger Band, actual transactions under high spot premiums, and the restocking pace of downstream battery enterprises.
![[SHFE lead morning news] SHFE and LME rise in tandem, SHFE lead night session approaches previous high of 16,380 yuan/mt](https://imgqn.smm.cn/usercenter/EhsCj20251217171721.jpeg)
