Social Inventory of Lead Ingots Remains High; Lead Prices Under Pressure and Fluctuating [SMM Lead Morning Meeting Summary]

Futures Market:

Overnight, LME lead opened at $2,076.5/mt, briefly touched a low of $2,076/mt during the Asian session before fluctuating upward. During the European session, it climbed to a high of $2,100/mt, then pulled back at the close, ending at $2,084.5/mt, up 0.77%.

Overnight, the most-traded SHFE lead 2504 contract opened at a high of 17,655 yuan/mt, fell to a low of 17,570 yuan/mt in early trading, and slightly rebounded at the close, ending at 17,595 yuan/mt, down 0.28%.

》Click to view SMM lead spot historical prices

Macro:

The US February retail sales MoM recorded 0.2%, below the expected growth of 0.6%. Due to the weaker-than-expected US retail sales data, the US dollar index plunged during the session. China's January-February national economic "report card" was released: total retail sales of consumer goods reached 8,373.1 billion yuan, up 4.0% YoY; industrial output above designated size increased by 5.9% YoY; and the average surveyed urban unemployment rate nationwide was 5.3%.

Spot Fundamentals :

In the Shanghai market, Chihong lead was quoted at 17,700-17,720 yuan/mt, with a premium of 30-50 yuan/mt against the SHFE lead 2504 contract. In Jiangsu and Zhejiang regions, Tongguan and JCC lead were quoted at 17,670 yuan/mt, on par with the SHFE lead 2504 contract. SHFE lead fluctuated upward, and as yesterday was the delivery day for the SHFE lead 2503 contract, suppliers were mostly busy with transferring to delivery warehouses, resulting in fewer quotes. Meanwhile, primary lead smelters maintained firm ex-factory quotes with premiums over the SMM 1# lead average price, while secondary lead was quoted at a discount of 100-0 yuan/mt against the SMM 1# lead average price. Downstream enterprises mainly made just-in-time procurement, with some focusing on long-term contract purchases.

Inventory: On March 17, LME lead inventory increased by 6,925 mt to 211,700 mt. As of March 17, the total social inventory of lead ingots in five regions monitored by SMM reached 71,700 mt, up 5,500 mt from March 10 and up 4,000 mt from March 13.

》Click to view the SMM metal industry chain database

Lead Price Forecast:

Yesterday was the delivery day for the SHFE lead 2503 contract, and delivery cargoes gradually arrived at warehouses over the weekend, pushing social inventory of lead ingots above the 70,000 mt threshold to a four-month high. Recently, lead prices have fluctuated upward, with the overall center of gravity moving higher. However, spot market transactions were weaker than futures, with the spread between futures and spot prices remaining around 200 yuan/mt, prompting some suppliers to continue transferring to delivery warehouses. Meanwhile, the in-plant inventory of major primary lead smelters has fallen below 10,000 mt (as of March 13, the weekly in-plant inventory of primary lead enterprises was 5,700 mt), limiting the subsequent transfer of lead ingots to warehouses. After delivery, the inventory buildup trend in social inventory may slow. Additionally, the lead ingot import window briefly opened earlier, and certain imported lead is expected to arrive soon, which warrants attention for its impact on ingot production and inventory. Overall, lead prices may face short-term pressure and fluctuate.