Lead-Acid Battery Traditional Off-Season Is Expected to Arrive, Bulls Reduce Positions, SHFE Lead Closed Lower Overnight [SMM Lead Morning News]

SMM, February 24:

Last Friday, LME lead opened at $2,000/mt and fluctuated downward during the Asian session. Entering the European session, LME lead came under pressure and weakened to a low of $1,972.5/mt due to a stronger US dollar. However, as shorts reduced their positions, LME lead rebounded and reached a high of $2,011/mt before closing at $2,002.5/mt, up 1.03%.

On Friday night, the most-traded SHFE lead 2504 contract opened at 17,030 yuan/mt, briefly touching a high of 17,075 yuan/mt in early trading. However, as the traditional off-season for lead-acid batteries approached, longs reduced their positions, causing SHFE lead to fluctuate downward and hit a low of 16,995 yuan/mt before closing at 17,020 yuan/mt, down 0.49%.

The spread between futures and spot prices for lead widened WoW. Even though the SHFE lead 2502 contract delivery was completed, suppliers did not halt their transfer to delivery warehouses, and social inventories of lead ingots are expected to continue increasing. Meanwhile, production data from secondary lead enterprises showed an increase, driving further demand for scrap batteries. This made scrap battery prices more likely to rise than fall, providing cost support for lead prices. Under the influence of these two factors, lead prices are likely to maintain a high-level consolidation trend.