End-use consumption is sluggish, and spot trading activity for lead ingots remains low [SMM Morning Lead Meeting Summary]

Futures Market:

Last Friday, LME lead opened at $1,961.5/mt, briefly touching a high of $1,965/mt in early trading before fluctuating downward due to the strong performance of the US dollar index. LME lead fell to a low of $1,941/mt by the end of the session and closed at $1,945/mt, down 0.66%.

On Friday evening, the most-traded SHFE lead 2506 contract opened at 16,940 yuan/mt, briefly touching a high of 16,960 yuan/mt in early trading before fluctuating downward, dragged down by the performance of LME lead. The low during the session was 16,825 yuan/mt, and it closed at 16,855 yuan/mt, down 0.53%.

》Click to view historical SMM spot lead quotes

Macro Aspects:

Trump said he would announce a trade agreement in the next three to four weeks. US Secretary of State Rubio: The US will not expand sanctions against Russia. Trump hinted at supporting a ban on US lawmakers trading stocks. Chinese Foreign Ministry: China and the US have not held consultations or negotiations on tariff issues. Six Chinese departments issued a document to optimize the departure tax refund policy, lowering the threshold for tax refunds.

Spot Market Fundamentals:

In the Shanghai market, Chihong lead was quoted at 17,010-17,070 yuan/mt, with premiums of 0-50 yuan/mt against the SHFE lead 2505 contract. Jijin lead was quoted at 17,010-17,040 yuan/mt, with premiums of 0-20 yuan/mt against the SHFE lead 2505 contract. In the Jiangsu-Zhejiang region, JCC lead was quoted at 17,010-17,040 yuan/mt, with premiums of 0-20 yuan/mt against the SHFE lead 2505 contract. SHFE lead continued to hold up well, with suppliers quoting prices in line with the market. The premiums and discounts for warehouse cargoes showed relatively small differences, while the discounts for cargoes self-picked up from primary lead smelters widened. Primary lead from major producing regions was quoted at discounts of 180-40 yuan/mt against the SHFE lead 2505 contract ex-factory. Secondary lead smelters mostly cut production, with moderate enthusiasm for shipping. Some quotes even showed an inversion, with secondary refined lead quoted at discounts of 50 yuan/mt to premiums of 50 yuan/mt against the SMM 1# lead average price ex-factory. With lead prices strengthening on Friday, downstream enterprises showed increased enthusiasm for purchasing, especially for cargoes with large discounts. Trading activity in the spot market further improved, though there were regional differences.

Inventory: On April 25, LME lead inventory decreased by 3,800 mt to 274,075 mt. As of April 24, the total social inventory of lead ingots across five locations tracked by SMM reached 46,200 mt, down 16,700 mt from April 17 and 8,500 mt from April 21.

》Click to view the SMM Metal Industry Chain Database

Today's Lead Price Forecast:

For primary lead smelters, there are both increases and decreases in production, with relatively small changes in supply. Meanwhile, the spread between futures and spot prices for lead has widened, increasing suppliers' intention to transfer to delivery warehouse. Attention should be paid to changes in social inventory of lead ingots next week. Spot transactions are expected to remain at relatively small discounts. For secondary lead, due to factors such as losses and production cuts, the discounts for secondary refined lead prices have gradually narrowed, and even an inversion with primary lead has occurred. It is expected that secondary lead enterprises may stand firm on quotes for shipping before profitability improves. On the consumption side, downstream enterprises plan to take holidays during the Labor Day period. Coupled with weak end-use consumption, producers have purchased relatively small volumes of inventory before the holiday, and there is no expectation of a significant improvement in spot transactions.