Delivery of SHFE Lead Front-Month Contract; Short-Term Market Circulating Supply Decreases [SMM Lead Morning Meeting Summary]

Futures Market:

Last Friday, LME lead opened at $2,077.5/mt, fluctuated upward during the Asian session, and climbed to $2,090/mt during the European session. However, it weakened under pressure in late trading due to the upward correction of the US dollar index, hitting a low of $2,063/mt and closing at $2,068.5/mt, down 0.22%.

On Friday night, the most-traded SHFE lead 2504 contract opened at 17,680 yuan/mt, briefly touched a high of 17,685 yuan/mt at the beginning of trading, then fluctuated downward, hitting a low of 17,610 yuan/mt in late trading and closing at 17,635 yuan/mt, up 0.14%.

》Click to View SMM Lead Spot Historical Prices

Macro:

The preliminary US consumer confidence index for March fell from 64.7 a month ago to 57.9, marking the third consecutive monthly decline and the lowest level since November 2022. US trade policy: ① US Secretary of State stated that the US will conduct bilateral negotiations with trading partners after imposing tariffs. ② US Commerce Secretary mentioned that tariffs on imported cars might be imposed next month. Chinese Premier Qiang Li chaired the eighth plenary meeting of the State Council, emphasizing the need to focus more on enhancing policy efforts and fostering positive interaction and synergy between policy measures and market forces. The implementation of more proactive macro policies was highlighted to maximize policy effectiveness.

Spot Fundamentals:

In the Shanghai market, Chihong lead was quoted at 17,650-17,715 yuan/mt, with a premium of 50 yuan/mt against the SHFE lead 2504 contract. In Jiangsu and Zhejiang regions, Tongguan and JCC lead were quoted at 17,550-17,590 yuan/mt, on par with the SHFE lead 2504 contract. SHFE lead continued to strengthen, hitting a new high in nearly three months. Market circulation of cargoes remained limited, and suppliers stood firm on quotes. During this period, ex-factory quotes for primary lead cargoes self-picked up from production sites saw premiums gradually rise to over 100 yuan/mt against the SMM 1# lead average price, while secondary refined lead was quoted at discounts of 100-0 yuan/mt ex-factory. Downstream enterprises maintained purchasing as needed, with high-priced lead facing difficulties in transactions.

Inventory: On March 14, LME lead inventory increased by 4,725 mt to 204,775 mt. As of March 13, the total social inventory of SMM lead ingots across five regions reached 67,800 mt, up by 2,900 mt compared to March 7 and by 1,500 mt compared to March 10.

》Click to View SMM Metal Industry Chain Database

Lead Price Forecast Today:

Primary lead enterprises are expected to maintain stable or slightly increased production. The delivery of the SHFE front-month contract has reduced short-term market circulation of cargoes, and spot transactions are expected to remain at premiums. For secondary lead, as lead prices strengthen and smelters see improved profits, discounts for secondary refined lead may widen. Meanwhile, end-use consumption in the lead-acid battery market remains weak, with production relatively stable. Rising raw material prices for lead, antimony, and tin have increased cost pressure on battery enterprises, leading to raw material purchases being limited to as needed. Overall, lead prices are likely to hover at highs in the short term.