US Dollar Index Fluctuates at Highs, LME Lead Dips Before Rebounding Overnight [SMM Lead Morning Brief]

SMM February 28:

Overnight, LME lead opened at $2,008.5/mt. During the Asian session, it was pressured to a low of $1,991/mt due to the US dollar index fluctuating at highs. Entering the European session, it rebounded upward as bears reduced positions, reaching a high of $2,015/mt before closing at $2,008/mt, up 0.22%.

Overnight, the most-traded SHFE lead 2504 contract opened at 17,140 yuan/mt. It initially rose to a high of 17,235 yuan/mt before plunging to a low of 17,115 yuan/mt, then slightly rebounded at the close to settle at 17,180 yuan/mt, up 0.09%.

Recently, with the resolution of maintenance and other factors, the supply of primary and secondary lead has increased, while demand in the lead-acid battery sector has shown relatively small marginal changes. Spot market cargoes are relatively abundant, and spot transactions are generally conducted at discounts. Due to the significant spread between futures and spot prices, suppliers have concentrated on cargo pick-up for transfer to delivery warehouses, leading to a shift of in-plant inventory from smelters to social warehouses. As a result, the total social inventory has climbed again, reaching a nearly three-month high. Additionally, entering March, with the Chinese New Year holiday factors subsiding, the lead market's supply and demand are expected to increase simultaneously, particularly with the gradual release of new and resumed secondary lead capacity. Lead prices are likely to fluctuate rangebound.