Last Friday night, the weakness in LME lead continued. The benefit of the "trade-in" policy still needs a transmission period [SMM Lead Morning Comment]

Last Friday night, LME lead opened at $1,994/mt. It fluctuated downward during the Asian session, then consolidated around the daily moving average upon entering the European session, and trended downward to a low of $1,961/mt. Before the close, it slightly rebounded and ended at $1,970/mt, down $18/mt, a decrease of 0.91%.

Last Friday night, the most-traded SHFE lead 2410 contract opened at 16,880 yuan/mt and immediately trended downward due to the weak performance of LME lead, reaching a low of 16,600 yuan/mt, before closing at 16,660 yuan/mt, down 235 yuan/mt, a decrease of 1.39%.

On the macro side, the mixed impact of U.S. employment data is still being digested, while the strengthening US dollar index has pressured base metals to fluctuate downward. Additionally, the benefit of the domestic "trade-in" policy still requires a transmission period. Before there is a significant improvement in lead consumption, the delivery of the SHFE lead 2409 contract is on schedule, and holders' enthusiasm for moving inventory and delivery remains high, turning invisible inventories into visible inventories, which weighs on domestic lead prices. Meanwhile, some secondary lead enterprises are expected to resume production, exacerbating the supply tension of battery scrap, keeping its prices high, and increasing losses in secondary lead smelting, thus serving as a crucial support for lead prices. Looking forward, attention should still be given to the impact of macro disturbances, the narrowing of the price spread between primary and secondary refined lead, and the consumption transmission effect of the "trade-in" policy on the lead-acid battery market for electric bicycles and automobiles.