Downstream Enterprises Purchase on Dips as Needed, Spot Market Trading Activity Improves [SMM Lead Morning Comment Dec 20]

Overnight, LME lead opened lower at $1,974/mt, briefly touching a high of $1,975.5/mt during the Asian session. Due to the high-level fluctuation of the US dollar index, LME lead came under pressure during the European session, dipping to $1,955.5/mt and finally closing at $1,973/mt, down 0.5%.

Overnight, the most-traded SHFE lead 2502 contract opened at 17,415 yuan/mt, briefly touching a high of 17,430 yuan/mt in early trading before fluctuating downward. It dipped to 17,280 yuan/mt by the end of the session and closed at 17,335 yuan/mt, down 1.42%.

Macro side, the US Q3 GDP was revised up from 2.8% to 3.1%, exceeding expectations of no change. Initial jobless claims in the US decreased by 22,000 compared to the previous figure, a larger drop than expected. China's Ministry of Commerce announced plans to accelerate the release of policy documents promoting the debut economy.

Fundamentals, supply side, environmental protection-driven production restrictions continued to emerge. After dipping, SHFE lead rebounded relatively, while spot market circulating cargoes remained limited. Suppliers stood firm on quotes, with sharply increased premiums for cargoes self-picked up from production sites in regions affected by environmental protection measures. Downstream enterprises purchased on dips as needed, with increased inquiries, leading to improved trading activity in the spot market. Overall, lead prices are expected to maintain a fluctuating trend.