Macro subdued while fundamentals remain resilient, lead prices expected to continue consolidating on a subdued note [SMM Lead Morning Meeting Summary]

Futures:

Overnight, LME lead opened at $1,891.5/mt. The US October CPI beat expectations across the board, hitting the threshold for the aggressive rate hikes mentioned by Waller. The US dollar index rose sharply, while LME lead drifted lower throughout the day, with losses widening especially at night to a low of $1,877/mt. Toward the close, LME lead settled at $1,883/mt, down 0.48%.

On the macro front:

Chinese market: China's October exports rose 35.2% YoY, driven mainly by the AI hardware boom, while imports rose 41.6% YoY. Crude oil imports rose 13% MoM, the highest since March, and integrated circuit import value surged nearly 70% YoY.

Ex-China market: US October core CPI rose 0.3% MoM and headline CPI rose 0.4% MoM, both above expectations, putting a 50 bp December rate hike on the table. Fed Governor Waller sent the most hawkish signal: if inflation stays high, the Fed should hike 50 bp in December and walk back the previous three precautionary rate cuts. Fed 2026 voter Logan said at least two more hikes are needed, and the pace may accelerate. Fed Governor Bowman warned that if AI bets fail, the stock market could see a sharp correction.

:

In the lead spot market yesterday, SHFE lead continued to consolidate narrowly. Suppliers diverged significantly in selling interest: those holding spot cargoes actively quoted and sold, while those with no or limited spot cargoes held quotes firm at high premiums. Mainstream primary lead smelters quoted at premiums of 100-150 yuan/mt against the SMM #1 lead average price. For secondary lead, regional supply of refined lead varied widely. Some smelters continued to hold prices firm, with mainstream secondary refined lead quoted at premiums of 0-100 yuan/mt against the SMM #1 lead average price. Downstream enterprises only made just-in-time procurement and mostly stayed on the sidelines, leaving spot order trading subdued.

Inventory: As of November 10, LME lead inventory stood at 300,300 mt, flat from the previous trading day. SHFE lead ingot warrant inventory stood at 6,319 mt, also flat from the previous trading day.