LME Lead Outperforms SHFE Overnight, Lead Prices Continue High-Level Fluctuation [SMM Lead Morning Meeting Summary]

Futures Market:

Overnight, LME lead opened at $2,051/mt, edged up slightly during the Asian session, continued to fluctuate upward during the European session, reaching a high of $2,083/mt. Before the close, it consolidated slightly and finally settled at $2,082.5/mt, up $27.5/mt or 1.34%. Overnight, the most-traded SHFE lead 2504 contract opened at 17,575 yuan/mt, initially climbed to 17,640 yuan/mt before weakening to a low of 17,545 yuan/mt. It then rebounded to hover near the daily moving average and finally closed at 17,585 yuan/mt, up 140 yuan/mt or 0.80%.

》Click to view SMM lead spot historical prices

Macro Side: On Wednesday local time, data released by the US Department of Labor showed that February CPI inflation in the US was broadly below expectations, alleviating some market concerns and providing the US Fed with more room for interest rate cuts. Domestically, macro policies remained supportive, with Shenzhen promoting trade-in programs for e-bikes, offering a one-time subsidy of 500 yuan for each trade-in, and stabilizing and expanding automobile consumption.

Spot Fundamentals:  

In the Shanghai market, Chihong lead was quoted at premiums of 50 yuan/mt against the SHFE lead 2504 contract, while Honglu lead was quoted on par with the SHFE lead 2504 contract. In Jiangsu and Zhejiang regions, Tongguan and JCC lead were quoted at discounts of 30-0 yuan/mt against the SHFE lead 2504 contract. SHFE lead fluctuated upward, and with delivery approaching, suppliers stood firm on quotes, with limited transactions achieved for urgent needs. During this period, primary lead smelters had limited in-plant inventory, and some regions experienced tight regional supply, leading to sales at premiums (against SMM 1# lead price). Meanwhile, secondary refined lead supply slightly increased, with ex-factory quotes at discounts of 100-0 yuan/mt against the SMM 1# lead average price. Downstream enterprises made selective purchases based on demand, with some tight-supply regions accepting higher-priced goods, while others prioritized long-term contract purchases.

Inventory: As of March 12, LME lead inventory decreased by 1,450 mt to 201,800 mt, with the decline mainly from Singapore warehouses. According to SMM, as of March 10, the total social inventory of lead ingots in five major regions tracked by SMM stood at 66,300 mt, down 4,000 mt from March 3 but up 1,500 mt from March 7.

》Click to view the SMM metal industry chain database

Lead Price Forecast Today:

Overnight, base metals generally strengthened, with macro bullish factors continuing to ferment. Lead prices are expected to hover at highs. Fundamentals side, the lead market this week shows increases in both supply and demand. Affected by raw material supply, some smelters are standing firm on quotes, reluctant to sell, or prioritizing long-term contract sales, leading to a decline in market circulation in certain regions. On the end-use consumption side, the government work report proposed increasing subsidies for trade-in programs for e-bikes and automobiles. The extent to which this offsets the traditional off-season demand remains to be seen.