LME Lead Fluctuates at High Levels, Secondary Refined Lead Transactions Improve [SMM Lead Morning Meeting Summary]

Futures Market:

Overnight, LME lead opened at $2,040/mt, weakened slightly during the Asian session, fluctuated upward during the European session, and finally closed at a high of $2,055/mt, up $15/mt or 0.74%.

Overnight, the most-traded SHFE lead 2504 contract opened at 17,380 yuan/mt, hit a high of 17,435 yuan/mt in early trading, then consolidated above the daily moving average, and finally closed at 17,425 yuan/mt, down 35 yuan/mt or 0.20%.

》Click to View SMM Lead Spot Historical Prices

Macro: The China Securities Regulatory Commission stated that efforts should be made to consolidate the momentum of market stabilization and improvement and fully launch a new round of capital market reforms. The US tariff policies on major trading partners have caused global market volatility and heightened concerns about economic growth. Trade tensions and uncertainties about a US economic slowdown have intensified risk aversion sentiment in the non-ferrous metals market. The US dollar index hit its lowest level since mid-October last year, falling 0.51% overnight to 103.4.

Spot Fundamentals:  

In the Shanghai market, Chihong lead was quoted at a premium of 0-50 yuan/mt against the SHFE lead 2504 contract, while Honglu lead was quoted on par with the SHFE lead 2504 contract. In Jiangsu and Zhejiang regions, Tongguan and JCC lead were quoted at a discount of 30-0 yuan/mt against the SHFE lead 2504 contract. SHFE lead fluctuated upward, and suppliers quoted prices in line with the market, with some waiting for delivery and relatively firm quotes. Meanwhile, ex-factory cargoes from smelters were limited, and the northern market was still under production and transportation restrictions due to smog. Suppliers' premiums against the SMM 1# lead average price rose slightly compared to last Friday. Additionally, secondary lead smelters stood firm on quotes, with secondary refined lead quoted at a discount of 75-0 yuan/mt against the SMM 1# lead average price ex-factory, and a few even quoted at a premium of 50-75 yuan/mt. Downstream enterprises mainly purchased through long-term contracts, while spot orders were procured on a just-in-time basis.

Inventory: As of March 11, LME lead inventory fell by 1,650 mt to 203,250 mt, with the decline mainly from Singapore warehouses. According to SMM, as of March 10, the total social inventory of lead ingots in five major regions tracked by SMM stood at 66,300 mt, down 4,000 mt from March 3 but up 1,500 mt from March 7.

》Click to View SMM Metal Industry Chain Database

Lead Price Forecast Today:

Yesterday morning, lead prices strengthened, but spot market transactions remained weaker than futures. Some suppliers slightly lowered premiums and discounts against SHFE lead, and branded lead continued to be transferred to delivery warehouses. On the supply side, the tight supply of scrap batteries and lead concentrates continued to support lead prices. For refined lead, although the environmental protection inspection team has entered Anhui province, the supply of secondary refined lead has not been significantly affected recently. Downstream battery producers' sentiment of rushing to buy amid continuous price rise and concerns over subsequent secondary supply shortages increased their willingness to purchase, leading to better transactions for secondary refined lead compared to primary lead. Moving forward, attention should be paid to the impact of downstream production resumption and the recovery of refined lead supply after the end of environmental protection measures on prices.