Futures:
Overnight, the LME lead 3M contract opened at $1,919.0/mt on September 21. In the Asian session, futures opened lower and consolidated, dipping to $1,917.5/mt at one point. In the European session, they rebounded in consolidation. In the overlapping European and US sessions, late trading saw a sharp surge on heavy volume, reaching a high of $1,942.0/mt. Near the close, prices pulled back slightly from highs and eventually settled at $1,935.0/mt, up $14.0/mt or 0.73% from the previous trading day's closing price. The full-day trading range was $1,917.5–1,942.0/mt, with volume of 10,551 lots, up 1,955 lots, and open interest of 188,208 lots, up 3,639 lots. The daily candlestick recorded a large bullish candlestick.
Overnight, the SHFE lead 2611 contract opened higher at 16,470 yuan/mt in the night session. It shot up to 16,475 yuan/mt at the open, refreshing the high of this rebound, then quickly pulled back. From 23:00 to the early morning, it dipped to 16,385 yuan/mt at one point, then stabilized and rebounded, eventually settling at 16,440 yuan/mt, up 25 yuan/mt or 0.15% from the previous trading day's closing price. Volume was 34,901 lots and open interest was 73,416 lots. The daily candlestick recorded a small bullish candlestick with upper and lower shadows.
Overall, SHFE and LME lead strengthened in tandem. LME lead broke above its previous high on heavy volume and outperformed SHFE lead, while the SHFE lead 2611 contract pulled back slightly after shooting up and lagged relatively. Both have entered overbought territory on KDJ, and short-term chasing risks are accumulating.
On the macro front:
Overseas, on Monday US Fed officials again released hawkish signals. St. Louis Fed President Musalem said further rate hikes may be needed to curb inflation and that "better to hike now than later." Chicago Fed President Goolsbee also said clear action to hike rates is needed if inflation does not fall. In crude oil, the damaged Saudi oil pipeline is expected to resume shipments soon, and US-Iran talks to restart negotiations made progress. International oil prices fell for the fourth consecutive trading day, with geopolitical risk premium continuing to unwind. However, there were still disturbances in the Middle East: an oil tanker entering the Strait of Hormuz was hit by a shell, lightly injuring two crew members, and a valve on Libya's Sharara crude pipeline was closed by armed militants, causing a sharp drop in oilfield production. Today, focus can be on speeches by several officials including New York Fed President Williams and Fed Vice Chair Jefferson, as well as data such as US ADP employment, the eurozone's preliminary September consumer confidence, and the US September Richmond manufacturing index.
In China, Xi Jinping will pay a state visit to the US from September 23 to 25. The phased easing of China-US relations continues to boost market risk appetite. The People's Bank of China held a symposium with foreign financial institutions, stating it will steadily expand two-way opening of financial markets. The Political Bureau of the CPC Central Committee held a meeting and decided that the Fifth Plenary Session of the 20th CPC Central Committee will be held in Beijing from October 26 to 29.
Spot fundamentals:
Yesterday, SMM #1 lead price rose 75 yuan/mt from the previous trading day. With the holiday approaching, suppliers and smelters showed stronger willingness to sell and quoted actively. Premiums for primary lead Ex-works cargoes began to loosen, with mainstream production areas quoting premiums of 50–150 yuan/mt against SMM #1 lead average price. Regional divergence emerged: smelters in Henan mainly shipped according to scheduled orders, with spot orders at discounts of 50–20 yuan/mt against SHFE lead 2611 contract; smelters in Hunan saw easing sentiment to hold prices firm, with spot order premiums lowered to 100–150 yuan/mt; Jiangxi and Anhui spot orders were at premiums of 120–150 yuan/mt, with some being pre-sold October cargoes. For secondary lead, circulating supply was limited and smelters held prices firm, with mainstream production areas quoting secondary refined lead at discounts of 100 yuan/mt to premiums of 50 yuan/mt against SMM #1 lead average price. On the downstream side, enterprises' pre-holiday stockpiling has largely concluded, with weaker inquiry interest. They mainly digested inventories or made just-in-time procurement for cargo pick-up, and purchasing enthusiasm weakened WoW, with overall market transactions turning quieter.
Inventories: As of September 21, total social inventory of SMM lead ingot across five regions reached 65,700 mt, down 7,900 mt from September 14 and down 6,200 mt from September 17. LME lead inventory stood at 372,725 mt, down 900 mt from the previous trading day; SHFE lead warrant inventory totaled 49,076 mt, down 4,039 mt from the previous trading day.
Lead price forecast for today:
Overnight, LME lead broke above previous highs on expanding volume, and SHFE lead 2611 contract closed slightly higher in the night session, still lending some support to spot sentiment today. On the macro front, US Fed officials turned hawkish again and the US dollar index edged higher. Combined with overbought short-term indicators on both SHFE and LME, SHFE lead retreated after a rapid rise in the night session, and momentum for further gains in futures weakened. On the spot side, with the holiday approaching, suppliers and smelters showed stronger willingness to sell, and quoted premiums have begun to loosen. Downstream battery enterprises have largely wrapped up pre-holiday stockpiling and shifted to digesting inventories and just-in-time procurement. Spot lead prices are expected to consolidate at high levels with a firm bias today, with mainstream prices still likely to edge higher, but the room for gains has narrowed significantly from earlier. Focus can be placed on tonight's speeches by US Fed officials Williams and Jefferson and their impact on the US dollar and nonferrous metals sentiment, the volume-price performance of SHFE lead 2611 contract near previous highs, and the tug-of-war between suppliers holding prices firm to sell before the holiday and downstream wait-and-see sentiment.
![Slight Divergence Between SHFE and LME Lead: LME Lead Breaks Above $1,940/mt While SHFE Lead Lags [SMM Lead Morning Update]](https://imgqn.smm.cn/usercenter/TmYox20251217171721.jpeg)
