Under the dual decline in supply and demand, SHFE lead remains strong and upward [SMM Lead Morning Comment]

Overnight, LME lead opened at a low of $2,019.5/mt and fluctuated upward during the Asian session. In the European session, shorts continued to reduce positions, and LME lead remained strong and upward, finally closing at a high of $2,060/mt, up 2.49%.

Overnight, the most-traded SHFE lead 2501 contract opened at 17,250 yuan/mt and briefly touched a low of 17,220 yuan/mt at the beginning of the session. Boosted by tight spot supply due to the maintenance of several new domestic smelters, bulls increased positions, pushing SHFE lead up to 17,430 yuan/mt, and it finally closed at 17,415 yuan/mt, up 1.02%.

Macro side, the US Q3 GDP revised value remained unchanged at the initial value of 2.8%; durable goods orders in October slightly increased; initial jobless claims decreased; core PCE prices in October met expectations both YoY and MoM. The General Office of the CPC Central Committee and the General Office of the State Council issued the "Action Plan for Effectively Reducing the Logistics Costs of the Whole Society."

Fundamentals, as the end of November approaches, smelters have successively completed the settlement of November long-term contracts and started the sale of December long-term contracts. In December, primary lead smelters in Hunan and Guangdong will reduce the supply of long-term contracts due to maintenance expectations. For secondary lead, both resumption and maintenance of enterprises coexist, and overall supply is temporarily tight. On the consumption side, some lead-acid battery producers plan to reduce production recently, and the specific impact remains to be observed. Overall, lead prices may fluctuate at highs in the short term.