Overseas Market Welcomes Christmas, Domestic Lead Trading Focuses on Fundamentals [SMM Lead Morning Meeting Comment Dec 24]  

Overnight, LME lead opened at $1,983.5/mt. Against the backdrop of continued destocking of lead ingots, LME lead fluctuated upward, breaking through the $2,000/mt mark during the day and reaching a weekly high of $2,006/mt. However, the US dollar index surged strongly at night, putting pressure on base metals, and LME lead quickly pulled back to around $1,980/mt before finally closing at $1,993/mt, up 0.61%. Additionally, today is Christmas Eve, and the LME will close at 20:30 tonight.

Overnight, the most-traded SHFE lead 2502 contract opened at 17,415 yuan/mt. Against the backdrop of production cuts on the supply side, lead warehouse warrant inventory unexpectedly increased. SHFE lead initially dropped to 17,370 yuan/mt. Subsequently, the market continued to trade on supply-side environmental protection-driven production restrictions, with SHFE lead moving above 17,400 yuan/mt before finally closing at 17,485 yuan/mt, down 0.09%. Its open interest reached 61,421 lots, a decrease of 694 lots compared to the previous trading day.

Macro side, China's Premier stated that next year, China's economic and social development will still face many difficulties and challenges. Efforts should be made to seize time against various uncertainties, and for confirmed tasks, the earlier the better, accelerating progress to continuously consolidate the momentum of economic recovery and improvement. Additionally, Nissan and Honda officially initiated merger talks, expected to be completed by 2026, which would make it the third largest globally after the merger. Germany's Volkswagen reached a compromise with labor unions, promising not to close factories but planning comprehensive reforms of its German operations and cutting 35,000 jobs.

Fundamentally, regions such as Anhui, Henan, and Hebei recently issued heavy smog warnings, while Hunan faced environmental protection inspections. Both primary and secondary lead enterprises experienced production cuts or shutdowns, tightening lead ingot supply and prompting downstream enterprises to shift to consuming social warehouse inventory, leading to an expanded decline in lead ingot social inventory. Yesterday, Anhui, Henan, and other regions issued further air pollution warnings, affecting lead smelting enterprises' production and transportation to varying degrees. Meanwhile, as the year-end approaches, large enterprises are expected to close accounts and check inventory, reducing downstream procurement enthusiasm, and market trading may trend towards muted activity.