Lead Ingot Supply and Demand Both Increase, Lead Prices Fluctuate Upward [SMM Lead Morning Comment]

Last Friday, LME lead opened at $2,069/mt. During the Asian session, the market was quiet, and LME lead consolidated between $2,060-2,070/mt. Entering the European session, the trading range shifted upward to $2,070-2,080/mt, maintaining a box-shaped fluctuation throughout the day, and finally closed at $2,070/mt, up 0.07%.

Last Friday, the most-traded SHFE lead 2411 contract opened at 16,805 yuan/mt. During the session, there was a stalemate between bulls and bears, and SHFE lead fluctuated upward, mostly oscillating between 16,700-16,800 yuan/mt, and finally closed at 16,800 yuan/mt, up 0.93%. The open interest was 34,492 lots, a decrease of 1,524 lots from the previous trading day.

Macro side, China's Q3 GDP was 4.6%, and September retail sales of consumer goods accelerated by 3.2% YoY, with industrial output above designated size increasing by 5.4%. The PBOC officially launched the Securities, Fund, and Insurance Company Swap Facility (SFISF), with the first batch amounting to 500 billion yuan. It has approved 20 securities and fund companies, with the first batch application exceeding 200 billion yuan.

Fundamentally, after the completion of the SHFE lead 2410 contract delivery last week, visible lead ingot inventory increased as expected, with social inventory rising to a nearly five-month high. Meanwhile, lead consumption has shown a phased recovery, providing certain conditions for subsequent lead ingot destocking. Additionally, it is worth noting that the resumption of production by secondary lead smelters has increased, which will limit the space for lead ingot destocking.