Lead Fundamentals See Interwoven Bullish and Bearish Factors, Short-Term Lead Prices Maintain Wild Swings [SMM Lead Morning Meeting Minutes]

Futures:

Overnight, LME lead opened at $1,965/mt. After briefly touching $1,972.5/mt during the Asian session, it fluctuated downward. Entering the European session, LME lead extended its decline, dipping to $1,946/mt late in the session and closing at $1,947/mt, down 0.99%.

Overnight, the most-traded SHFE lead 2605 contract opened lower with a gap at 16,750 yuan/mt. After briefly touching a high of 16,765 yuan/mt early in the session, it fluctuated downward to a low of 16,670 yuan/mt, and closed at 16,675 yuan/mt, down 0.6%.

On the macro front:

On Thursday, US President Trump said the war among the US, Israel, and Iran was “about to end,” and the White House was optimistic about reaching an agreement, saying more face-to-face talks might be held in Pakistan this weekend. US Fed—Williams: if inflation pulls back to 2%, cutting interest rate is an appropriate move, but it has not reached that stage yet; Milan: inclined to cut interest rate three times this year, possibly four times; as of this morning, interest rate futures priced in cumulative interest rate cuts of about 9 bp for the full year. China’s Q1 GDP grew 5.0% YoY. The State-owned Assets Supervision and Administration Commission of the State Council held a special meeting to advance the industrial development of the low-altitude economy for central state-owned enterprises. National Bureau of Statistics: in March, the MoM change in sales prices of newly built commercial residential housing in first-tier cities shifted from flat in the previous month to an increase of 0.2%; value-added industrial output above designated size grew 5.7% YoY in real terms.

:

After lead prices rose, lead smelters and traders became more willing to make shipments, though differences in shipments remained. Mainstream producing areas were quoted at discounts of 25 yuan/mt to premiums of 130 yuan/mt against the SMM #1 lead average price, ex-works. For secondary lead, losses eased relatively, smelters’ willingness to ship increased, and secondary refined lead was quoted at discounts of 50-0 yuan/mt against the SMM #1 lead average price, ex-works. Meanwhile, the lead-acid battery market was in the off-season, downstream enterprises had limited procurement demand and stayed on the sidelines amid high prices, and spot order transactions were sluggish.

Inventory: On April 16, LME lead inventory fell by 350 mt to 275,625 mt; SMM social inventory of lead ingots across five regions edged up.

Today’s lead price forecast:

The lead-acid battery market is in the traditional consumption off-season, downstream enterprises have limited procurement demand, and spot market trading activity is relatively weak. In addition, due to delivery of the SHFE lead 2604 contract, suppliers transferred inventory to delivery warehouses, and overall social inventory continued to rise. Also, medium-to-large secondary lead enterprises in east China saw concentrated production cuts and suspensions, including factors such as routine maintenance and insufficient raw materials. In addition, the SHFE/LME price ratio for lead narrowed, import lead premium quotes rose, and the inflow of imported refined lead decreased relatively. With bullish and bearish factors intertwined on the fundamentals and geopolitical issues recurring, lead prices maintained wild swings in the short term.

Data Source Disclaimer: Data other than publicly available information is derived by SMM based on public information, market communication, and SMM's internal database models, and is for reference only and does not constitute decision-making advice.