Interest rate cut expectations soar, US dollar dives, lead futures close higher [SMM Lead Morning News]

SMM August 4:

On Friday last week, LME lead opened at $1,970/mt. During the Asian session, it fluctuated downward. Entering the European session, it first declined and then rebounded, touching a low of $1,961/mt before rebounding to make up for the losses. Due to the unexpectedly weak non-farm payrolls data, Trump fired the head of the Bureau of Labor Statistics, and expectations for an interest rate cut surged overnight. The US dollar index plunged, releasing pressure on LME lead. It reached a high of $1,981/mt in the tail end of trading and closed at $1,974/mt, up 0.23%.

On Friday evening, the most-traded SHFE lead 2509 contract opened at 16,780 yuan/mt. After briefly touching a high of 16,830 yuan/mt at the beginning of trading, it fluctuated downward. During the session, it reached a low of 16,745 yuan/mt and closed at 16,775 yuan/mt, up 0.69%.

In terms of the lead fundamentals, both supply and demand are expected to increase. Additionally, due to the decline in lead prices, the losses of secondary lead have further widened, dampening the enthusiasm of secondary lead smelters for shipping goods. As a result, the price of secondary refined lead has inverted compared to primary lead. Downstream enterprises have shifted their procurement towards the primary lead market, leading to a decrease in the inventory of primary lead enterprises. The next focus will be on the production trends of secondary lead enterprises under loss conditions and whether the inventory in social warehouses can be reduced. If either of these scenarios materializes, lead prices will have the opportunity to stop falling and rebound.

Data source statement: Except for publicly available information, all other data are based on publicly available information, market exchanges, and rely on SMM's internal database models, which are processed by SMM for reference only and do not constitute decision-making advice.