Lead Ingot Supply to Decrease in Phases, Lead Price Trend Likely to Maintain Fluctuating Trend [[SMM Morning Lead Meeting Summary]]

Futures Market:

Overnight, LME lead opened at $1,948/mt, initially touching a low of $1,942/mt. As the US dollar index weakened, the pressure on LME lead eased, leading to an upward correction. It reached a high of $1,978.5/mt in the late session and closed at $1,977/mt, up 1.65%.

Overnight, the most-traded SHFE lead 2506 contract opened at 17,015 yuan/mt, initially touching a high of 17,020 yuan/mt. It oscillated around the daily moving average, with a low of 16,940 yuan/mt, and closed at 16,965 yuan/mt, up 0.24%.

》Click to view historical SMM lead spot quotes

Macro Aspects:

The US Treasury Department raised its Q2 borrowing estimate to $514 billion. US Treasury Secretary: The "X-date" for the debt ceiling issue will be announced soon. Foreign media exclusive interview: Trump believes no red lines will change tariff policies. PBOC: Will implement RRR cuts and interest rate cuts in a timely manner and create new structural monetary policy tools. Chinese Foreign Ministry: There has been no recent phone call between the heads of state of China and the US. China's gold consumption in Q1 fell 5.96% YoY, while China's gold ETF holdings increased by 23.47 mt. NDRC: China will introduce and implement a series of measures to stabilize employment, stabilize the economy, and promote high-quality development; will establish and implement a childcare subsidy system and issue additional car purchase quotas. Conduct policy pre-research and reserve in a normalized and open manner.

Spot Fundamentals:

In the Shanghai market, Chihong lead was priced at 16,930-17,000 yuan/mt, with a premium of 50-80 yuan/mt against the SHFE lead 2505 contract. Jijin lead was priced at 16,880-16,945 yuan/mt, with a premium of 0-20 yuan/mt against the SHFE lead 2505 contract. JCC lead in the Jiangsu-Zhejiang region was priced at 16,880-16,945 yuan/mt, with a premium of 0-20 yuan/mt against the SHFE lead 2505 contract. After SHFE lead surged and then pulled back, suppliers stood firm on quotes, with premiums increasing compared to last Friday. Meanwhile, the discount for cargoes self-picked up from primary lead smelters (against the SHFE lead 2505 contract) narrowed. Due to production cuts in the secondary lead sector, the availability of secondary refined lead was limited, with quotes at a discount of 50-0 yuan/mt against the SMM 1# lead average price, ex-factory. With the Labour Day holiday approaching for downstream enterprises, they maintained just-in-time procurement only. Some enterprises that remained operational purchased at lower prices, with regional differences in market transactions persisting.

Inventory: On April 28, LME lead inventory decreased by 3,050 mt to 271,025 mt. As of April 28, the total social inventory of lead ingots in five regions tracked by SMM reached 44,500 mt, down 10,100 mt from April 21 and 1,600 mt from April 24.

》Click to view SMM Metal Industry Chain Database

Today's Lead Price Forecast:

Recently, the supply imbalance of scrap batteries has been prominent. Last week, due to issues such as insufficient scrap supply and losses, the number of secondary lead enterprises reducing or halting production increased, leading to a temporary reduction in lead ingot supply. Social warehouse inventories in the vicinity of lead consumption hubs continued to decline. Additionally, as the Labour Day holiday approaches this week, downstream lead-acid battery enterprises are planning to take holidays one after another, with some enterprises reducing their pre-holiday procurement. It is expected that the subsequent decline in social lead ingot inventories will slow down. During the Labour Day holiday, there will be a temporary lull in lead consumption. Coupled with the upcoming delivery of the SHFE lead 2505 contract after the holiday, social lead ingot inventories are expected to stop declining and start increasing. Overall, the lead price trend is likely to maintain a fluctuating pattern.