Macro bullish factors VS off-season consumption, lead prices continue to consolidate at high levels [SMM Morning Lead Meeting Summary]

Futures Market:

Overnight, LME lead opened at $1,973.5/mt. During the Asian session, it fluctuated upward. Entering the European session, it consolidated sideways around the intraday average line, eventually closing at $1,993/mt, up $27.5/mt or 1.4%. Overnight, the most-traded SHFE lead contract opened at 16,930 yuan/mt and fluctuated upward throughout the session, eventually closing at 16,980 yuan/mt.

Macro Aspects: In terms of data, figures released by the US Department of Labor on the 13th showed that the US Consumer Price Index (CPI) rose 2.3% YoY in April. After excluding the more volatile food and energy prices, the core CPI rose 2.8% YoY in April, still significantly higher than the US Fed's long-term target of 2%. On the evening of the 13th, the three major US stock indices had mixed changes. The Dow Jones fell 100 points, while the tech-heavy Nasdaq rose over 1.6%, and the S&P 500 rose nearly 1%, erasing its losses for the year. Tech stocks collectively surged, with Nvidia rising over 5%.

》Click to view SMM historical spot lead quotes

Spot Fundamentals:

In the Shanghai market, Chihong lead was quoted at discounts of 30-0 yuan/mt against the SHFE lead 2506 contract or at parity against the SHFE lead 2505 contract. Honglu lead was quoted at discounts of 30-20 yuan/mt against the SHFE lead 2506 contract. In the Jiangsu-Zhejiang region, JCC and Jinde lead were quoted at discounts of 30-0 yuan/mt against the 2506 contract. SHFE lead held up well amid fluctuations. Suppliers were actively selling, and discounted quotations increased. Meanwhile, the discounts for cargoes self-picked up from primary lead smelters against SHFE lead widened further, with a few discounts approaching 200 yuan/mt. The availability of secondary refined lead was limited, with quotations at discounts of 50-0 yuan/mt against the SMM 1# lead price, and a few premium quotations still existed. Downstream enterprises had strong wait-and-see sentiment and made fewer inquiries, resulting in sluggish spot order transactions.

Inventory: As of May 13, LME lead inventory increased by 1,375 mt to 253,175 mt, with the entire increase coming from Singapore warehouses. According to SMM, as of May 12, the total social inventory of lead ingots in five regions tracked by SMM reached 47,100 mt, up 1,200 mt from May 6 and down over 400 mt from May 8.

Today's Lead Price Forecast:

Underpinned by sustained macroeconomic tailwinds, lead prices held up well overnight. This week, suppliers are mainly focusing on spot cargo sales. Market transactions improved slightly yesterday, with suppliers showing low intention to transfer to delivery warehouses. Recently, expectations for production cuts among secondary lead smelters have not eased. It is still necessary to continue monitoring changes in scrap battery availability and the movement of delivery brands transferring to delivery warehouses.

》Click to view SMM Metal Industry Chain Database