[record of the SMM lead Internal Morning meeting on 23 October]

2019.10.23

Summary of lead morning meeting:

Macro:

The latest announcement from the Office of the United States Trade Representative ((USTR)) indicates that the exclusion process will begin on 31 October 2019 for products subject to a $300 billion tax on China (part A list with a 15 per cent tariff effective from 1 September 2019). In addition, the announcement also indicated that this week the USTR will issue a list of additional excluded products for Chinese imports for an additional 25 per cent tariff, that is, a tariff of RMB 200 billion, which includes about 150 exclusion requests. The legislative timetable for Brexit was vetoed and the British Prime Minister suspended the Brexit agreement. The prime minister will announce a general election if the EU agrees to a parliamentary request to postpone Brexit until January 31, officials in the prime minister's office have warned. Mr Johnson's bet is that voters will support him in favour of leading Britain out of the EU under its Brexit deal with the EU.

Fundamentals:

Lead continued to decline, and the spot market supply is abundant, recycled lead to maintain deep discount quotation, primary lead shipments generally frustrated, downstream do not hold optimistic expectations for the future, more cautious mining on demand, market transactions have not improved for the time being. Among them, Shanghai market Jinsha, Ambrose lead 16880-16890 yuan / ton, the 1911 contract discount 30-20 yuan / ton quotation; the south 1689016910 yuan / ton, the 1911 contract discount 20 yuan / ton to the flat water quotation; the original lead refinery quoted to the SMM1# lead average price discount 100-150 yuan / ton shipped; recycled lead, the reduction lead market supply is abundant, recycled lead is quoted to the average price of electrolytic lead discount of 400600 yuan / ton.

Lead price:

Lun lead newspaper long shadow small negative line, the pace of uplink is blocked again, but from a technical point of view, Lun lead is still in the long market trend, and LME0-3 promotion water to maintain a large back structure, Lun lead is expected to continue high concussion. Shanghai lead temporarily closed the big negative line, fell below the 60-day moving average support, the upper pressure averages, from the technical graphics, Shanghai lead has broken position, and open the downlink space, coupled with the fundamentals are weak, Shanghai lead may continue to weaken within the day. SMM1# lead prices are expected to fall by 100-150 yuan per tonne today.