Spot market transactions show no signs of improvement. Be cautious of the impact of expected social inventory buildup of lead ingots on lead price trends. [SMM Lead Morning Meeting Summary]

Futures:

Overnight, LME lead opened at $1,991/mt, fluctuated downward during the Asian session, then rose before falling back in the European session, hitting a high of $1,999.5/mt. Due to bulls reducing positions, LME lead dropped, touched a low of $1,984/mt before closing at $1,989.5/mt, down 0.25%.

Overnight, the most-traded SHFE lead 2510 contract opened at 16,890 yuan/mt, briefly touched a high of 16,915 yuan/mt before fluctuating downward, and closed at 16,870 yuan/mt after hitting a low of 16,850 yuan/mt, up 0.03%.

On the macro front:

The US ADP employment data for August recorded 54,000, below the expected 65,000. Trump signed an executive order to formally implement the US-Japan trade agreement, imposing a 15% tariff on almost all Japanese goods. World Gold Council: Gold ETFs attracted $5.5 billion in August, with outflows in Asia offset by strong buying in Europe and the US.

PBOC: On September 5, it will conduct 1,000 billion yuan in outright reverse repo operations with a maturity of three months. Two departments issued the "Action Plan for Stable Growth in the Electronic Information Manufacturing Industry, 2025-2026," strengthening efforts in CPU, high-performance AI servers, and hardware-software collaboration, and conducting adaptability tests for AI chips and large models.

:

SHFE lead reversed its upward trend and continued to consolidate after pulling back. Suppliers followed the market to sell, while some refused to budge on prices. Downstream enterprises showed weak purchasing interest, and spot market transactions saw no improvement. Meanwhile, smelters' quotations for primary lead showed minor differences, with some expanding discounts against SHFE lead. Mainstream origins were quoted at discounts of 50 yuan/mt to premiums of 30 yuan/mt against the SMM #1 lead average price ex-works. For secondary lead, regional supply disparities were evident, and smelters' selling strategies diverged further. Secondary refined lead was quoted at discounts of 100 yuan/mt to premiums of 25 yuan/mt against the SMM #1 lead average price ex-works.

Inventory: On September 4, LME lead inventory fell by 3,350 mt to 251,200 mt. As of September 4, SMM's social inventory of lead ingots across five regions totaled 66,100 mt, down 1,000 mt from September 1.

Today's lead price forecast:

This week, maintenance at secondary lead smelters increased, further tightening regional supply, especially in the largest production area—Anhui, where production significantly declined, prompting downstream enterprises in the region and surrounding areas to shift purchases toward primary lead. Meanwhile, due to the SCO summit and military parade in the first half of the week, vehicle operations were restricted in parts of North and Central China, prolonging delivery cycles for smelters. Some downstream enterprises continued to consume lead ingot inventories from social warehouses, leading to a continued decline in social inventory. Additionally, with the conclusion of events such as the military parade on September 3, vehicle restrictions in some regions were lifted, leading to an increase in spot market supply. However, current lead consumption remains subdued, and there is a risk of social inventory buildup for lead ingots in the subsequent period. Caution is warranted regarding its potential drag on lead price trends.

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