Lead prices fluctuated at highs, with focus on subsequent consumption performance in digesting lead ingot inventory [SMM Lead Morning Meeting Summary]

Futures:

Overnight, LME lead opened at $1,994/mt, fluctuated downward during the Asian session, and touched a low of $1,986/mt in the European session. However, it rebounded due to the weak US dollar and finally closed at a high of $2,007/mt, up 0.5%.

Overnight, the most-traded SHFE lead 2510 contract opened at 16,875 yuan/mt, initially dipped to 16,840 yuan/mt before fluctuating upward. As the scale of production cuts at domestic secondary lead smelters expanded, bulls increased positions, driving the contract to a high of 16,950 yuan/mt before closing at 16,930 yuan/mt, up 0.53%.

On the macro front:

On Monday, the US dollar index came under pressure and declined as market bets on US Fed interest rate cuts intensified, coupled with growing concerns over its independence. Besant suggested Trump might declare a national housing emergency this fall, with potential measures including exemptions for building materials. He expressed confidence that the Supreme Court would uphold Trump's tariff policies.

Xi Jinping chaired the 25th Meeting of the Council of Heads of State of the Shanghai Cooperation Organization and delivered an important speech. Xi Jinping: Accelerate the establishment of the Shanghai Cooperation Organization Development Bank. SHFE: Further expand the range of tradable products for qualified foreign investors. The August RatingDog China Manufacturing PMI rose to 50.5, re-entering expansion territory.

:

SHFE lead continued to consolidate, with suppliers quoting prices accordingly, offering both premiums and discounts. Downstream enterprises showed limited purchasing enthusiasm, with sparse inquiries, resulting in sluggish spot order market transactions. Meanwhile, primary lead smelters mostly maintained discounted quotes for self-picked-up cargoes, with mainstream origins quoted at discounts of 50 yuan/mt to premiums of 50 yuan/mt against the SMM #1 lead average price ex-works. For secondary lead, smelter maintenance increased, further reducing market quotations, with some secondary refined lead quoted at discounts of 50 yuan/mt to premiums of 25 yuan/mt against the SMM #1 lead average price ex-works.

Inventory: On September 1, LME lead inventories fell by 1,500 mt to 259,550 mt. As of September 1, SMM lead ingot social inventories across five regions totaled 67,100 mt, down by about 100 mt from August 28.

Today's lead price forecast:

Recently, the traditional peak season for the lead-acid battery market has been lackluster, with most battery manufacturers maintaining a produce-based-on-sales model and purchasing raw material lead as needed. Additionally, lead prices have been consolidating at high levels, prompting downstream enterprises to exercise caution in purchasing "high-priced lead," resulting in sluggish spot market transactions. From late August to early September, events such as the Tianjin SCO Summit and Beijing military parade are underway, restricting vehicle transportation in parts of North and Central China. This has prolonged lead ingot delivery cycles for smelters and reduced cargo flows to social warehouses, leading to relatively small social inventory changes. However, it is noteworthy that in-plant inventories at some lead smelters have already accumulated. Once transportation restrictions are lifted, if consumption still shows no significant improvement, there is a risk of accumulation in lead ingot social inventory, which could weigh on lead price trends.

Data Source Statement: Except for publicly available information, other data are derived from public information, market exchanges, and SMM's internal database model, processed by SMM for reference only and not constituting decision-making advice.