Lead Futures Continued Gains Overnight, Fear of Declines Slightly Eased in the Spot Market [SMM Lead Morning Comment]

Overnight, LME lead opened at $1,956/mt. During the Asian session, it rose slightly, and in the European session, it fluctuated upward, reaching as high as $2,000/mt. Before the close, it saw a slight pullback, finally closing at $1,989.5/mt, up $34.5/mt or 1.76%.

Overnight, the most-traded SHFE lead 2410 contract opened at 16,635 yuan/mt. After lightly touching a high of 16,645 yuan/mt in the early session, it declined to a low of 16,525 yuan/mt. Subsequently, it rose to around 16,600 yuan/mt, and eventually closed at 16,580 yuan/mt, up 115 yuan/mt, or 0.7%.

Macro side, inflation data supports the US Fed's 25-basis point rate cut, and the US dollar index continued to fluctuate upward. Fundamentals side, secondary refined lead sellers were reluctant to sell, with secondary refined lead prices lower than primary lead. Spot transactions for primary lead in regions like Hunan and Henan gradually improved, with discounts slightly narrowing compared to before. As delivery approaches, in-plant inventory will continue to be transferred to social inventory and has already significantly declined since late August. Downstream enterprises are expected to have moderate growth in operating rates in September. Market sentiment gradually eased after lead prices stabilized. Support for lead prices remains acceptable, but attention should be paid to downstream operating performance and the increase in social inventory.