Supply-Side Benefits Exhausted, Lead Prices Slightly Weakened [SMM Lead Morning Meeting Summary]

Futures Market:

Overnight, the most-traded SHFE lead contract opened at 17,145 yuan/mt, initially rose to a high of 17,450 yuan/mt before fluctuating downward, touched a low of 17,390 yuan/mt, and then consolidated around 17,400 yuan/mt, finally closing at 17,400 yuan/mt, down 100 yuan/mt, a 0.57% decline. Overnight, LME lead opened at $2,030/mt, fluctuated downward during the Asian session, and continued to fluctuate weakly under pressure against the daily average after entering the European session, lightly touched a low of $2,022/mt, and finally closed at $2,022.5/mt, with a 0% change.

Click to view SMM lead spot historical quotes

Macro Aspect: Deputy Governor of the People's Bank of China Xuan Changneng stated that the current domestic and overseas environments are undergoing profound changes, and global supply chains are continuously being affected. China's domestic economic structure is also constantly adjusting. Against the backdrop of increasing uncertainty, China has clarified a moderately loose monetary policy and will choose the timing for RRR cuts and interest rate cuts based on domestic and overseas economic and financial situations. In response to the US imposing a 25% tariff on imported cars, Germany, Canada, Japan, the EU, South Korea, Mexico, and Brazil have all voiced their opposition to the new US tariff policy and stated that they will consider taking measures to respond.

Spot Fundamentals :

In the Shanghai market, Chihong lead was quoted at a premium of 0-50 yuan/mt against the SHFE lead 2504 contract; in the Jiangsu-Zhejiang region, JCC and Jinde lead were quoted at parity against the SHFE lead 2504 contract. SHFE lead reversed its trend and fell, suppliers' willingness to sell decreased, some stood firm on quotes, with smelter ex-factory cargoes' premiums narrowing (against the SMM 1# lead average price), while secondary refined lead maintained a large discount, at a discount of 160-0 yuan/mt ex-factory against the SMM 1# lead average price. Downstream enterprises' inquiry enthusiasm increased, some purchased as needed, some cautiously waited and watched, and spot order market transactions slightly improved.

Inventory Aspect: As of March 28, LME lead inventory decreased by mt to mt; as of March 27, SMM lead ingot social inventory in five regions totaled 69,200 mt, a decrease of 4,800 mt compared to March 20; a decrease of 2,700 mt compared to March 24.

Click to view SMM metal industry chain database

Today's Lead Price Forecast:

As the previous supply-side tightening benefits have been exhausted, market concerns about the traditional consumption off-season have intensified, and some downstream enterprises plan to take holidays during the Qingming Festival, lead ingot inventory buildup expectations have risen. The high demand for scrap from secondary lead enterprises has made scrap battery prices more likely to rise than fall, and the cost support for secondary lead will continue to play a role. In the spot market, lead futures continued to fluctuate upward, but market sentiment was sluggish, downstream demand was weak against the backdrop of the traditional off-season, lead-acid battery enterprises' destocking was not significant, and spot premiums in various regions have seen slight declines.