Lead futures fluctuated downward, secondary refined lead supplies increased, downstream buyers purchased on the dip, slowing the momentum of inventory increases [SMM Lead Morning Meeting Comment Dec 13]

Overnight, LME lead opened at $2,041.5/mt, fluctuated around the daily moving average during the Asian session, and then slightly weakened. Entering the European session, it continued to fluctuate downward, reaching a low of $2,001/mt and finally closing at this level, down $31/mt, a decline of 1.53%.

Overnight, the most-traded SHFE lead 2501 contract opened at 17,460 yuan/mt, tested a low of 17,420 yuan/mt at the beginning of the session, then rose to a high of 17,540 yuan/mt, and later fluctuated around the daily moving average, finally closing at 17,465 yuan/mt, down 65 yuan/mt, a decline of 0.37%.

On the macro front, US Producer Prices in November increased more than expected MoM. The US dollar index slightly strengthened. The market gradually digested the expectation that the US Fed would cut interest rates by 25 basis points at next week's policy meeting.

Domestically, on the fundamentals side, with lead prices opening higher and moving downward during the week, the spot market saw average transaction activity. Secondary lead smelting enterprises resumed production and new capacity ramp-up progressed as scheduled, leading to an increase in market supplies, prompting downstream enterprises to opt for lower-priced secondary lead sources for just-in-time procurement. Additionally, as the delivery of the most-traded SHFE lead 2412 contract approaches, suppliers are transferring to delivery warehouses, and with the year-end cash flow recapture factor, some suppliers still prefer to sell off their holdings for cash realization. Compared to the inventory build-up before the mid-November delivery round, the increase in lead ingot inventory before this delivery has slowed down.