Lead Prices Rebounded, Downstream Panic Eased, Spot Market Trading Gradually Became Active [SMM Lead Morning Comment]

Overnight, LME lead opened at $1,995/mt. It consolidated around the daily moving average during the Asian session before rising slightly. Entering the European session, it fluctuated around $2,030/mt, touched a high of $2,037/mt, and finally closed at $2,033.5/mt, up $44/mt or 2.21%.

Overnight, the most-traded SHFE lead 2410 contract opened at 16,790 yuan/mt. After initially touching a low of 16,735 yuan/mt, it rose to consolidate around 16,800 yuan/mt and finally closed at 16,810 yuan/mt, up 160 yuan/mt or 0.96%.

Macro-wise, market expectations for a US Fed rate cut persist, and the US dollar index retreated, which boosted non-ferrous metals overall, leading to a significant rise in LME lead. On the domestic fundamentals side, during the previous lead price decline, losses expanded for secondary lead smelters. In some regions, the ex-factory price of secondary refined lead once rose to a premium of 50-200 yuan/mt over the SMM 1# lead average price, resulting in a price inversion with primary lead. As lead prices stabilized and rebounded, downstream companies' rigid demand shifted back to primary lead, mainly to deplete smelters' in-plant inventory. After the futures lead strengthened, warehouse warrant transactions turned sluggish. As the Mid-Autumn Festival approaches, some downstream companies plan to take a 1-2 day holiday, leading to a short-term lack of consumption. SMM survey indicates that most downstream battery companies have not built up inventory before the Mid-Autumn Festival, with primary stocking actions likely concentrated before the National Day. Future attention should focus on the actual production recovery of secondary refined lead and the operating conditions of downstream companies during the holidays. In the short term, lead ingot inventory may still accumulate.