Bulls Retreat Causes Lead Futures to Fluctuate Downward, Secondary Refined Lead Supply Gradually Eases [SMM Lead Morning Comment Dec 12]

Overnight, LME lead opened at $2,068.5/mt, fluctuating around the daily moving average during the Asian session. Entering the European session, it slightly consolidated before falling to a low of $2,032/mt, finally closing at $2,032/mt, down $33/mt, a decrease of 1.6%.

Overnight, the most-traded SHFE lead 2501 contract opened at 17,690 yuan/mt. After initially rising to a high of 17,705 yuan/mt, bulls continued to reduce positions and exit, causing SHFE lead to fluctuate downward to a low of 17,550 yuan/mt, ultimately closing at 17,555 yuan/mt, down 100 yuan/mt, a decrease of 0.57%.

Macro side, the US November CPI rose for two consecutive months, in line with market expectations, enhancing the anticipation of a Fed interest rate cut next week. The US dollar index hovers at highs.

Fundamentals side, the effect of smoggy weather on secondary refined lead production and transportation slightly eased. With increased circulating spot supply, spot cargoes were still quoted at small discounts, and transactions were relatively mediocre. Primary lead smelter inventories remain low, with smelters in Hunan, Guangdong, and Henan maintaining relatively low inventory levels, with no expectation of lowering premiums. Overnight, LME lead decline dragged down SHFE lead, with bulls cautiously avoiding risks, putting short-term pressure on SHFE lead at high levels.