The US dollar dropped back slightly, and LME lead surged significantly. Domestic social inventory growth slowed down [SMM Lead Morning Comment]

Overnight, LME lead opened at $1,964.5/mt. During the Asian session, it fluctuated upward slightly, and in the European session, it first dipped and then rose, hitting a low of $1,948.5/mt before climbing to a high of $1,998.5/mt. It finally closed at this level, up $47.5/mt, an increase of 2.43%.

Overnight, the most-traded SHFE lead 2412 contract opened at 16,740 yuan/mt. It initially rose to a high of 16,820 yuan/mt before weakening slightly to a low of 16,730 yuan/mt. It then fluctuated under pressure around the daily moving average and finally closed at 16,775 yuan/mt, up 35 yuan/mt, an increase of 0.21%.

Macro side, the US dollar index dropped back slightly, easing the pressure on base metals, leading to a rebound in LME lead.

Fundamentally, primary lead smelters maintained stable production in November, with limited room for increase. The smog warnings in Hebei, Henan, and other regions were lifted, and vehicle transportation in Henan and other areas returned to normal, leading to a gradual transfer of refined lead inventory from northern warehouses. Although secondary refined lead production mainly resumed this week, environmental protection measures in autumn and winter may still affect secondary refined lead supply. This week marks the last week for the delivery of November lead ingot long-term contracts. Before the start of new monthly long-term contracts, the transferable inventory from smelters is expected to be limited, and there was no significant adjustment in the premium of primary lead at the beginning of the week. Downstream battery producers had a moderate operating rate, but due to the sharp fluctuations in lead prices, they generally adopted a wait-and-see approach. Once lead prices stabilize, procurement demand is expected to be gradually released, and no significant increase in social inventory is anticipated in the near future.