Year-End Ingot Supply Faces Limitations, Lead Prices Continue to Fluctuate Upward [SMM Lead Morning Comment Dec 5]

Overnight, LME lead opened at $2,078/mt, with the overall trading center further moving upward during the day, reaching a high of $2,088/mt, marking a one-and-a-half-month high. Even during the European session, LME lead was suppressed by the strong US dollar, experiencing a short-term decline, but subsequently recovered the losses, finally closing at $2,086.5/mt, up 0.12%.

Overnight, the most-traded SHFE lead 2501 contract opened at 17,560 yuan/mt. The year-end limitations on ingot supply remain a market anchor, with SHFE lead fluctuating upward, gradually moving from around 17,550 yuan/mt towards 16,700 yuan/mt, and finally closing at 17,685 yuan/mt, up 0.83%. The open interest reached 55,566 lots, a decrease of 456 lots from the previous trading day.

Macro side, Xinhua News Agency reported breaking the "growth worship"; China's economic growth of around 5% is acceptable; stabilize the real estate and stock markets, and strengthen risk prevention in key areas. US Fed Beige Book: Economic activity slightly increased in most regions of the US, with businesses more optimistic about future demand; November ISM services index unexpectedly fell, with the expansion rate hitting a three-month low; November US ADP employment data showed an increase of 146,000 jobs, the lowest in four months. Additionally, the French government collapsed for the first time in over 60 years due to a no-confidence motion passed by parliament, with Prime Minister Barnier, in office for only three months, becoming the shortest-serving prime minister since 1958.

Fundamentals, with rising lead prices, secondary lead profits are improving, but some large secondary lead enterprises that have been shut down for a long time are unable to resume production quickly in the short term, leading to limitations in year-end ingot supply. Meanwhile, the spread between futures and spot prices exceeds 200 yuan/mt, increasing the willingness of delivery brands to deliver, resulting in a sentiment to stand firm on quotes and limited market circulation. We need to monitor the movements of suppliers transferring stocks for delivery.