Overnight Lead Market: SHFE Outperformed LME, Domestic Lead Prices Supported by Costs [SMM Lead Morning Comment]

Overnight, LME lead opened at $2,029/mt and fluctuated downward after the opening. During the European session, it dipped to $1,996/mt before rebounding to the daily moving average, finally closing at $2,008.5/mt, down $18.5/mt or 0.91%.

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

Macro side, US economic data was mixed, and the outlook for US Fed's easing policy remains unclear. The US dollar index weakened slightly. On October 30, the NDRC and five other departments issued the "Guiding Opinions on Vigorously Implementing Renewable Energy Substitution Actions," proposing 17 specific measures from various aspects.

Fundamentals side, despite disruptions in secondary refined lead production, the total supply of refined lead and downstream operating rates both increased in October. The supply of lead concentrate and battery scrap remained relatively tight. After consecutive declines in lead prices, mid-week battery scrap prices were adjusted downward under pressure, but the decrease was limited. Inventories at primary and secondary refined lead smelters remained generally low, maintaining premiums and reluctance to sell. Downstream buyers mainly fulfilled long-term contracts and generally adopted a wait-and-see approach. Domestic lead prices were clearly supported by costs, and the market is likely to continue fluctuating rangebound.