Overnight Lead Market: Overseas Market Outperformed Domestic Market, Domestic Smelters Continued to Hold Back Sales, Market Sentiment Remained Cautious [SMM Lead Morning Comment]

Overnight, LME lead opened at $2,003.5/mt. During the Asian session, it was under pressure and consolidated along the intraday moving average. Entering the European session, it dipped to $1,993/mt before rebounding to a high of $2,039/mt. After a slight consolidation, it finally closed at $2,037/mt, up $33/mt, or 1.65%.

Overnight, the most-traded SHFE lead 2412 contract opened at 16,650 yuan/mt. It fluctuated downward at the beginning of the session, reaching a low of 16,550 yuan/mt. After a slight rebound, it was pressured by the intraday moving average and finally closed at 16,565 yuan/mt, down 125 yuan/mt, or 0.75%.

Macro side, US October ADP employment data recorded the largest increase since March this year. The September PCE price index annual rate recorded 2.1%, the lowest level since early 2021. The US Fed is still expected to cut interest rates by 25 basis points next week, and the US dollar index continued to fluctuate downward.

Fundamentals side, according to SMM survey, primary lead smelters' production was relatively stable this week. However, due to smog warnings in Henan, vehicle movement was restricted, extending the delivery cycle of cargoes self-picked up from production site. Lead prices fluctuated downward during the week, and downstream spot demand was limited, leading to slow digestion of lead ingot social inventory. Additionally, with November approaching, the delivery of the SHFE lead 2411 contract is on the agenda. Coupled with the widening spread between futures and spot prices, some holders plan to transfer inventory for delivery, resulting in a slight increase in lead ingot social inventory.