Macro Policies Are Expected to Provide Strong Support, with the Overall Operating Center of Lead Prices Moving Upward [SMM Lead Morning Meeting Notes]

Overnight, LME lead opened at $2,028/mt. Boosted by the rise in SHFE lead and the weakening US dollar, the overall trading center of LME lead moved further upward compared to the previous day. Notably, during the nighttime session, the US dollar index hit a new four-month low, leading to a broad rally in base metals. LME lead surged to $2,054.5/mt at one point, marking a new high since December 11, 2024. By the close, some longs took profits, and LME lead ultimately settled at $2,039/mt, up 0.44%.

Overnight, supported by macro policy expectations, the most-traded SHFE lead 2504 contract opened at 17,440 yuan/mt. After the opening, SHFE lead fluctuated upward, reaching an intraday high of 17,530 yuan/mt, the highest level since December 24, 2024. In the latter half of the trading session, the upward momentum of the longs weakened, and SHFE lead gave back part of its gains, finally closing at 17,500 yuan/mt, up 0.69%. Its open interest reached 48,542 lots, an increase of 390 lots compared to the previous trading day.

Currently, during the "Two Sessions" period, numerous economic stimulus policies have been proposed, including the issuance of ultra-long-term special government bonds to support the trade-in of consumer goods. The People's Bank of China has also stated that it will cut interest rates and RRR at an appropriate time this year. Supported by policy expectations, base metal prices have continued to strengthen. Meanwhile, as lead prices rise, downstream enterprises' pessimistic sentiment toward the market has eased, and they have gradually made purchases as needed. Inventory in warehouses in the major consumption areas of Jiangsu and Zhejiang has reversed to a decline. Additionally, a pollution event has recently occurred in the Beijing-Tianjin-Hebei region and surrounding areas, with heavy pollution weather yellow or orange alerts issued in Hebei, Henan, and Shandong, affecting production and transportation on the supply side. Overall, in the short term, lead prices are expected to fluctuate upward, with the trading center of SHFE lead gradually moving higher.