Lead Prices Fluctuated Downward, Testing Cost Support, Secondary Refined Lead Quotes Were Higher than Primary Lead in Some Regions [SMM Lead Morning Comment]

Overnight, LME lead opened at $2,029/mt, fluctuated downward after the opening, and hit a low of $1,996/mt during the European session before rebounding to the daily moving average, finally closing at $2,008.5/mt, down $18.5/mt, a decrease of 0.91%.

Overnight, the most-traded SHFE lead 2412 contract opened at 16,560 yuan/mt, initially rose to a high of 16,625 yuan/mt before weakening to a low of 16,535 yuan/mt, and then consolidated sideways, finally closing at 16,555 yuan/mt, down 130 yuan/mt, a decrease of 0.78%.

Macro side, the market currently believes there is a 95% chance that the US Fed will cut interest rates by 25 basis points next week. The US dollar index continues to fluctuate, and domestic fiscal stimulus measures continue to boost market sentiment.

Fundamentals side, the refined lead market remains tightly balanced in supply and demand. Primary lead and secondary refined lead smelters stand firm on quotes and are reluctant to sell. In some regions, secondary refined lead quotes are higher than primary lead. Downstream, long-term contract deliveries are the main focus, with general wait-and-see market sentiment and poor dip buying intentions. Continuous declines in LME lead have dragged down domestic lead prices, testing the cost support of secondary refined lead again. Attention should be paid to the follow-up of battery scrap prices and the recovery situation after the end of production cuts due to environmental protection. In the short term, lead prices are likely to continue fluctuating downward.