Overnight Lead Prices Pulled Back from Highs, Social Inventory Increased as Expected [SMM Lead Morning Meeting Summary]

Futures Market:

Overnight, LME lead opened at $2,077.5/mt, fluctuating around the daily moving average during the Asian session. Entering the European session, it dipped to a low of $2,064.5/mt before rebounding to a high of $2,084.5/mt. It slightly pulled back before the close, finally settling at $2,073/mt, down $9.5/mt or 0.46%.

Overnight, the most-traded SHFE lead 2504 contract opened lower at 17,510 yuan/mt. It initially rose to a high of 17,595 yuan/mt before weakening and consolidating around the daily moving average, eventually closing at 17,560 yuan/mt, down 15 yuan/mt or 0.09%.

》Click to View SMM Lead Spot Historical Prices

Macro: On Wednesday local time, data released by the US Department of Labor showed that February CPI inflation in the US was below expectations across the board, alleviating some market concerns and providing the US Fed with more room for interest rate cuts. Domestically, macro policies remained supportive. In Shenzhen, the trade-in program for e-bikes was promoted, offering a one-time subsidy of 500 yuan for each trade-in, aiming to stabilize and expand automobile consumption.

Spot Fundamentals:

Quotations were scarce in the Shanghai market. In Jiangsu and Zhejiang, Tongguan and JCC lead were quoted at 17,550-17,590 yuan/mt, with discounts of 30-0 yuan/mt against the SHFE lead 2504 contract. With SHFE lead trending strongly upward, suppliers offered limited quotes, with some waiting for delivery. Meanwhile, refinery cargoes self-picked up from production sites were limited, and spot orders were quoted firmly. Discounts for secondary lead widened, with downstream enterprises making just-in-time procurement and cautiously observing high-priced goods. Secondary refined lead suppliers slightly expanded ex-factory discounts, with mainstream cargoes quoted at discounts of 100-50 yuan/mt against the SMM 1# lead average price. Tax-free refined lead was quoted at 16,250-16,300 yuan/mt ex-factory. Some downstream battery producers intended to restock just-in-time, but high lead prices fluctuating at highs kept them waiting for a price drop. Secondary lead smelters reported poor transactions today.

Inventory: As of March 13, LME lead inventory fell by 1,750 mt to 200,050 mt, with the decline mainly from Singapore warehouses. According to SMM, as of March 13, the total social inventory of lead ingots across five regions tracked by SMM reached 67,800 mt, up by 2,900 mt from March 7 and by 1,500 mt from March 10.

》Click to View SMM Metal Industry Chain Database

Lead Price Forecast Today:

As the delivery date for the SHFE lead 2503 contract approaches, suppliers are expected to continue transferring to delivery warehouses, with social inventory maintaining its upward trend. Heavy pollution weather warnings in regions such as Hebei and Henan have been lifted, and vehicle transportation has returned to normal, alleviating the pressure of in-plant inventory accumulation after smelters resumed production. Additionally, the recent brief opening of the lead ingot import window is expected to bring a certain volume of imported crude lead into the domestic market, potentially filling the gap in domestic lead concentrates and scrap batteries, and quickly converting into refined lead. Furthermore, large-scale delivery brand smelters are planning maintenance in late March, which may slow the growth of social inventory of lead ingots. Lead prices are likely to continue fluctuating at highs.