Current lead consumption remained moderate, while lead futures showed mediocre performance. [SMM Lead Morning News]

SMM September 5:

Overnight, LME lead opened at $1,991/mt and fluctuated downward during the Asian session. After entering the European session, LME lead initially rose and then fell, reaching a high of $1,999.5/mt during the period. Due to bulls reducing their positions, LME lead declined, hitting a low of $1,984/mt at the close, and finally closed at $1,989.5/mt, down by 0.25%.

Overnight, the most-traded SHFE lead 2510 contract opened at 16,890 yuan/mt, touched a high of 16,915 yuan/mt early in the session, and then fluctuated downward. It hit a low of 16,850 yuan/mt at the close and finally closed at 16,870 yuan/mt, up by 0.03%.

This week, maintenance activities among secondary lead smelters have increased, further tightening regional supply, especially in Anhui, the largest producing region, where production has significantly decreased. This has led downstream enterprises in the local and surrounding areas to favor primary lead for procurement. Meanwhile, in the first half of the week, due to the Shanghai Cooperation Organization (SCO) summit and military parade activities, vehicle operations were restricted in some regions of North China and Central China, lengthening the delivery cycles for smelters. Some downstream enterprises continued to deplete their lead ingot inventories from social warehouses, resulting in a continued decline in social inventory of lead ingots. Additionally, with the conclusion of activities such as the military parade on September 3, vehicle restrictions were lifted in some regions, increasing the availability of spot cargo in the spot market. However, current lead consumption is performing generally, and there may be a risk of inventory buildup in social inventory of lead ingots in the future, warranting caution against its potential drag on lead price trends.

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