Futures:
Overnight, the LME lead 3M contract opened at $1,938.0/mt on September 22, shot up briefly in Asian trading before quickly dipping, then bottomed out during European hours. It traded in a range of $1,928.5-1,941.5/mt throughout the day, eventually closing at $1,932.0/mt, down $3.0/mt or 0.16% from the previous trading day's closing price. Trading volume was 10,061 lots, slightly lower, while open interest was 190,116 lots, up 1,908 lots. The daily candlestick recorded a small bearish candlestick.
Overnight, the SHFE lead 2611 contract opened higher at 16,485 yuan/mt in the night session, shot up to 16,495 yuan/mt at the open, piercing the upper Bollinger Band and refreshing the high of this rebound, then quickly pulled back. The night session drifted lower, hitting a low of 16,395 yuan/mt, and eventually closed at 16,405 yuan/mt, down 25 yuan/mt or 0.15% from the previous trading day's closing price. Night session volume was 29,727 lots, significantly lower, while open interest was 72,581 lots, down 1,491 lots. The overnight candlestick closed as a bearish candlestick.
Both SHFE and LME retreated after rapid rise, with KDJ turning downward from overbought territory. Short-term risk of chasing highs is accumulating and upward momentum is weakening; however, both still hold above the middle Bollinger Band with support below intact, limiting room for deep correction, and are likely to consolidate at highs.
On the macro front:
Overseas, tensions in the Middle East continued to ease. US officials held a three-hour meeting with Iran. Trump said the talks were productive and another meeting would be arranged soon. Iran confirmed the meeting with the US and put forward conditions for reopening the strait, including lifting the maritime blockade, unfreezing Iranian assets, and ending wars on all fronts, but denied reports of "opening the strait within 7 days after unfreezing." Meanwhile, Saudi Arabia restarted its east-west crude pipeline and will resume crude exports from Yanbu port. Gulf states jointly urged the US during the UN General Assembly to avoid further escalation with Iran. As a result, international oil prices pulled back notably, with WTI crude falling 2.37% to $89.48/barrel, breaking below the $90 mark. The US dollar index drifted higher, twice approaching 100.70 before pulling back. Today, focus may be on the preliminary September manufacturing and services PMIs for Europe and the US, Fed Governor Barr's speech, and EIA crude inventory.
In China, Xi Jinping began a state visit to the US from September 23 to 25, which kicked off today and is a market focus. Premier Li Qiang conducted a survey in Shanghai, emphasizing accelerating the cultivation and expansion of emerging and future industries and continuously strengthening advanced manufacturing. The "15th Five-Year" Plan for the Light Industry and Textile Industry Development was released.
Spot fundamentals:
Yesterday, SMM #1 lead price rose 50 yuan/mt from the previous trading day. SHFE lead remained strong, and suppliers mostly followed market conditions. The tightness of cargoes self-picked up from production site at primary lead smelters continued to ease, with high premium quotations slightly lowered. Mainstream production-area quotations were at premiums of 50-120 yuan/mt against the SMM #1 lead average price, ex-works. Regional divergence emerged: spot tightness in Henan eased slightly, with a small amount of current-month cargoes appearing in the market. Spot orders were quoted at discounts of 50-20 yuan/mt against the SHFE lead 2611 contract, ex-works, with no improvement in transactions. In Hunan, smelters sold in line with market conditions, with spot orders at premiums of 100-150 yuan/mt, but actual transactions leaned toward premiums of 100 yuan/mt or below. In Jiangxi and Anhui, spot orders were at premiums of 120-150 yuan/mt, with some being pre-sales of October cargoes. For secondary lead, many smelters have reduced or halted production, while operating enterprises held prices firm for shipments. Secondary refined lead from mainstream production areas was sold at discounts of 100 yuan/mt to premiums of 25 yuan/mt against the SMM #1 lead average price. On the downstream side, with lead prices elevated, battery enterprises mostly adopted a wait-and-see attitude apart from just-in-time procurement, with some waiting for new monthly long-term contracts to commence. Spot market transactions were weak.
Inventory: As of September 22, LME lead inventory stood at 369,700 mt, down 3,025 mt from the previous trading day; SHFE lead ingot warrant inventory totaled 47,460 mt, down 1,616 mt from the previous trading day.
Today's lead price forecast:
Overnight, LME lead and the SHFE lead 2611 contract retreated after rapid rises near previous highs in succession. Both domestic and overseas KDJ indicators turned downward after overbought conditions, bringing the short-term short-covering rally to an end and shifting into high-level consolidation. In the spot market, the SMM #1 lead price increase narrowed for consecutive sessions, with suppliers actively selling, premiums loosening, and supply tightness easing somewhat. However, downstream battery enterprises remained on the sidelines, and spot transactions were weak. Lead inventory continued to draw down, and with the earlier price-supporting stance of suppliers and smelters still in place, lead prices still have support on the downside. Today, spot lead prices are expected to consolidate at high levels with a firm bias and a slowing upward momentum, tracking small fluctuations in futures, with limited upside and downside.
![Bulls take profit and exit; SHFE lead 2611 contract retreats after rapid rise, closing down 0.15% [SMM Lead Morning News]](https://imgqn.smm.cn/usercenter/mfCMp20251217171721.jpeg)
![SHFE lead 2611 contract twice tested the upper Bollinger Band without success, with growing divergence above the previous high [Lead Futures Brief Comment]](https://imgqn.smm.cn/usercenter/TmYox20251217171721.jpeg)
