Raw Material Costs Support Lead Futures to Fluctuate Upward [SMM Lead Morning Brief]

SMM March 20:

Overnight, LME lead opened at $2,089.5/mt, fluctuated upward during the Asian session, peaked at $2,104.5/mt during the European session, then plunged to a low of $2,080/mt before closing at $2,089/mt, down 0.12%.

Overnight, the most-traded SHFE lead 2505 contract opened at 17,750 yuan/mt, briefly touched a high of 17,760 yuan/mt in early trading, but was dragged down by the decline in LME lead, plunging to a low of 17,640 yuan/mt before closing at 17,655 yuan/mt, down 0.06%.

Scrap battery supply is tight, with prices continuing to rise, providing strong support for lead prices. Secondary lead smelters face high raw material costs, and ex-factory discounts for refined lead have narrowed. Downstream buyers maintain purchases based on rigid demand, with attention on the impact of rising raw material prices on the profitability of secondary lead smelters. Additionally, a major smelter is expected to undergo maintenance in late March, which may lead to a temporary tightening of primary lead spot supply. Overall, in the short term, lead prices are expected to fluctuate upward.