Futures Market:
Overnight, LME lead opened at $1,939/mt. The futures market fluctuated downward in the morning session, moving from around $1,950/mt to $1,935/mt. Subsequently, as the US dollar index weakened, base metals generally rebounded. Meanwhile, LME lead inventory continued to decline, causing LME lead prices to stop falling and rebound. Towards the end of the session, LME lead prices suddenly dropped, reaching a low of $1,917/mt, the lowest in nearly two weeks. LME lead eventually closed at $1,918/mt, down by 0.7%.
Overnight, the most-traded SHFE lead 2506 contract opened at 16,740 yuan/mt. After opening, SHFE lead prices oscillated between 16,750-16,800 yuan/mt for an extended period. Towards the end of the session, domestic and overseas lead prices fell in tandem, with SHFE lead prices dropping to around 16,750 yuan/mt. It eventually closed at 16,675 yuan/mt, down by 0.09%, with open interest at 37,264 lots, a decrease of 1,190 lots from the previous trading day.
》Click to view historical SMM spot lead quotations
Macro Aspects: Vice Premier of the State Council He Lifeng will visit Switzerland and France and hold high-level Sino-US economic and trade talks, as well as the 10th China-France High-Level Economic and Financial Dialogue. At 9 a.m. on Wednesday, the People's Bank of China, the China Securities Regulatory Commission, and others will introduce the relevant situation of "a package of financial policies to support market stability and expectations". The EU plans to expand countermeasures: If negotiations fail, it will impose additional tariffs on 100 billion euros worth of US goods. Leaders of the US and Canada meet: Carney says Canada will never sell, and Trump says "never say never". "Rush imports" lead to the US trade deficit widening to a record high of $140.5 billion in March.
In the spot lead market yesterday, after the Labour Day holiday, SHFE lead prices opened lower. Some suppliers raised their premiums and discounts, while others actively sold, with premiums and discounts remaining unchanged from before the holiday. The discounts for cargoes self-picked up from primary lead smelters narrowed, with mainstream production areas quoting at a discount of 100-40 yuan/mt against the SHFE lead 2506 contract ex-factory. Secondary lead smelters generally held back from selling at low prices, with fewer quotations, while traders offered lower prices. Secondary refined lead was quoted at a discount of 100-0 yuan/mt against the SMM 1# lead average price ex-factory. Additionally, downstream enterprises, in the early stages of production resumptions, maintained a cautious attitude towards falling lead prices, with an increase in inquiries but relatively few actual transactions. In the trading market, warehouse cargoes in the Jiangsu, Zhejiang, Shanghai region were quoted at a premium of 0-100 yuan/mt against the SHFE lead 2505 contract.
Inventory: As of May 6, total LME lead inventory stood at 261,500 mt, a decrease of 2,625 mt from the previous trading day. The total social inventory of SMM lead ingots across five locations reached 45,900 mt, an increase of 1,400 mt from April 28 and over 600 mt from April 30.
》Click to view the SMM Metal Industry Chain Database
Today's Lead Price Forecast:
On the first day after the holiday, lead prices weakened. Downstream enterprises mostly adopted a wait-and-see attitude, with relatively sluggish transactions in the spot market. Social warehouse inventory of lead ingots also increased compared to before the holiday.During the Labour Day holiday, lead-acid battery enterprises had longer holidays than lead smelters, creating a natural gap in lead consumption. As a result, smelters generally saw an increase in inventory. Additionally, with the SHFE lead 2505 contract expected to enter delivery next week, there is a possibility of delivery brands being transferred to delivery warehouses, which may lead to unreported inventory becoming reported inventory, potentially dragging down lead prices. Furthermore, lead prices have diverged from the trend of raw material prices. In particular, scrap battery prices have remained high and even risen against the trend, exacerbating losses for secondary lead enterprises. Close attention should be paid to the impact of production trends in secondary lead enterprises on prices in the near future.
