Environmental Protection Factors & Downstream Hesitation to Purchase Amid Rising Prices: Short-Term Lead Prices May Hover at Highs [Lead Futures Brief Review]

Published: Mar 11, 2025 16:18

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[SMM Lead Futures Brief Review] During the day, the most-traded SHFE lead 2504 contract opened at 17,460 yuan/mt, fluctuated downward after the opening, hit a low of 17,365 yuan/mt in the afternoon, and finally closed at 17,400 yuan/mt, down 0.09%, with an open interest of 44,340 lots...

The most-traded SHFE lead 2504 contract opened at 17,460 yuan/mt today, fluctuated downward after the opening, hit a low of 17,365 yuan/mt in the afternoon, and finally closed at 17,400 yuan/mt, down 0.09%, with an open interest of 44,340 lots. This week is the week before the delivery of the SHFE lead 2503 contract. SHFE lead hovered around 17,500 yuan/mt, while trading in the spot market was weaker than in futures. The spread between futures and spot prices is not expected to narrow, and branded lead continued to be transferred to delivery warehouses, leading to a rise in social inventories of lead ingots as expected. Supply side, primary and secondary lead smelters saw both resumption and production cuts, with significant regional differences in lead ingot supply between the north and south. Additionally, heavy pollution weather occurred in the Beijing-Tianjin-Hebei region and surrounding areas, causing some secondary lead smelters to suspend production. In Anhui, certain smelters might be affected by environmental protection inspections, leading to a slight decline in supply. Furthermore, regions such as Hebei, Henan, and Shandong successively issued yellow and orange heavy pollution weather emergency alerts, potentially restricting some vehicle transportation and tightening regional lead ingot supply (mainly due to reduced circulating cargo). Attention should be paid to the recovery of lead ingot supply after the heavy pollution weather alerts are lifted. In summary, lead prices are likely to hover at highs in the short term.

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