[SMM Analysis] focus on the emergence of inventory inflection Point in the Market after lead Price break

SMM April 14: since the end of March Shanghai lead continued to rebound after the continuation of the shock market. After the Shanghai lead 2005 contract opened higher today, it rose sharply along the shock range, rising to 14235 yuan / ton at one point, and closed at 14180 yuan / ton at noon today, up 2.35 percent.

Affected by the macro events of reduced crude oil production and higher gold prices, the market pessimism has been repaired, coupled with the lead led by Lun, which is conducive to boosting the trend of lead in Shanghai.

In terms of fundamentals, according to SMM research, as of April 10, the total inventory of lead ingots in the five places of SMM reached 10, 000 tons, down more than 1300 tons from last Friday, and has been declining for seven consecutive weeks since the end of February. In the case of low inventory, there is the risk of soft position.

On the supply side, the supply of recycled lead continues to increase, but the smelting raw materials are still limited, the short-term supply side is still in a state of tension, we need to pay attention to the changes in the supply of smelting waste. However, the circulating supply of electrolytic lead in the market is relatively tight, and according to the SMM survey, the average price of recycled refined lead to SMM1# electrolytic lead is 150-100 yuan / ton, the regeneration shows price advantage, and part of the demand flows to recycled lead.

On the consumer side, lead batteries ushered in the off-season, the opening season procurement is not as expected, superimposed the impact of the overseas epidemic, export orders blocked, lead battery enterprises inventory pressure of finished products, the market to maintain a promotional atmosphere, at the same time, a small number of enterprises began to cut production plans. If there is no significant improvement in subsequent consumption, pay attention to whether storage enterprises reduce production behavior.

SMM believes that the short-term lead price is still under pressure, the expected increment of supply is greater than the incremental consumption, to a certain extent, there is the possibility that consumption is weaker than the previous month, but due to the strong consistency of short selling in the market, there is a risk of being forced to take positions in low inventories, so we can see that short positions are not firm enough, and the price as a whole is in a volatile market, so it is recommended to wait for the inflection point to go to the warehouse.

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