Consumption Peak Season Underperforms, Short-Term Lead Prices May Remain Range-Bound [SMM Lead Morning Meeting Summary]

Futures:

Last Friday, LME lead opened at $1,989.5/mt, fluctuating upward throughout the day, especially during the European session as LME lead inventory declined and the US dollar index dropped, with the intraday high reaching $2,004/mt. However, during the night session, the US dollar index rebounded, causing LME lead to relinquish most of its gains and exhibit a pattern of jumping initially and then pulling back. It eventually closed at $1,988/mt, down 0.08%.

Last Friday, the most-traded SHFE lead 2510 contract opened at 16,915 yuan/mt. Initially driven by LME lead's strong performance, SHFE lead rose sharply to an intraday high of 16,925 yuan/mt. However, weak domestic consumption persisted, leading to a downward trend after a higher opening, with SHFE lead closing at 16,840 yuan/mt, down 0.24%. Open interest increased by 448 lots to 49,874 lots compared to the previous trading day.

On the macro front:

Last Friday, US August non-farm payrolls data showed an addition of 22,000 jobs, significantly below expectations, with the unemployment rate hitting a four-year high of 4.3%. US Treasury Secretary Besant indicated that 2024 non-farm payrolls data might be revised down by 800,000. The "New Fed Wire" suggested the September interest rate cut is almost certain, but subsequent rate cut debates will be more complex. US President Trump adjusted global tariff policies, exempting key commodities like gold, tungsten, and uranium. China's July foreign exchange reserves rose 0.91% MoM, marking the central bank's 10th consecutive month of gold purchases.

:

Last Friday in the lead spot market, SHFE lead continued to consolidate, with suppliers generally offering at discounts. Quotations in Jiangsu, Zhejiang, and Shanghai against the SHFE lead 2510 contract were at discounts of 60-0 yuan/mt. Downstream enterprises only purchased as needed, with extensive price negotiations. In some regions, cargoes self-picked up from production sites traded at expanded discounts of 70 yuan/mt against the SMM #1 lead average price ex-works. For secondary lead, due to regional supply disparities, smelters' sales strategies varied, with secondary refined lead quotations ranging from discounts of 100 yuan/mt to premiums of 25 yuan/mt against the SMM #1 lead average price ex-works.

Inventory: As of September 5, LME lead inventory decreased by 3,000 mt to 248,200 mt, while SHFE lead ingot inventory totaled 66,834 mt, up 2,162 mt WoW.

Today's lead price forecast:

Recently, production cuts at domestic secondary lead smelters have increased, gradually tightening supply. Meanwhile, logistics vehicle restrictions in North and Central China were lifted, boosting spot circulation. However, the traditional peak season for lead-acid batteries underperformed, with downstream enterprises making just-in-time procurement, becoming one of the key factors weighing on lead prices. In the absence of other new factors, short-term lead prices are expected to maintain a consolidating trend.

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