Fundamentals Remain Mediocre with Slightly Warmer Macro Expectations, Lead Prices Expected to Continue Consolidating [SMM Lead Morning Meeting Minutes]

Futures:

Overnight, LME lead opened at $1,980/mt and traded in the doldrums throughout the session, hitting a low of $1,972/mt. Even though LME lead inventory continued its downward trend, it had limited impact on futures trading. In the final session, LME lead stopped falling and rebounded, returning to the previous price level, and finally closed at $1,988.5/mt, up 0.53%.

Overnight, the most-traded SHFE lead 2510 contract opened at 16,815 yuan/mt. After opening, it consolidated for a long time between 16,810-16,825 yuan/mt. Approaching the close, SHFE lead's price center moved slightly higher, and it finally closed at 16,845 yuan/mt, up 0.03%. Its open interest stood at 50,284 lots, down 183 lots from the previous trading day.

On the macro front:

Zheng Shanjie of the National Development and Reform Commission (NDRC): Strive to complete the annual economic and social development goals and tasks, continuously unleash domestic demand potential in H2, and further promote the deep integration of technological innovation and industrial innovation. US inflation unexpectedly fell, with August PPI down 0.1% MoM, turning negative for the first time in four months, and the YoY growth rate of 2.6% was lower than expected. After the PPI release, Trump stated: There is no inflation, Powell must cut interest rates significantly immediately. After the PPI release, the US dollar index turned lower, approaching a more than two-month low. Offshore yuan rose over 100 points intraday, breaking through 7.12 and approaching a ten-month high.

:

In the lead spot market yesterday, SHFE lead reversed its trend and pulled back. Suppliers' quoted discounts showed no significant change. Quotations in the Jiangsu, Zhejiang, Shanghai area against the SHFE lead 2510 contract were at discounts of 50-0 yuan/mt. Downstream enterprises maintained purchasing as needed. During this period, smelters in the relatively northern part of north China saw inventory reduction, and their quotations were relatively firm, while the South China market mostly sold at discounts. Mainstream production site cargoes self-picked up from production site were quoted at discounts of 50 yuan/mt to premiums of 70 yuan/mt against the SMM #1 lead average price ex-works. In terms of secondary lead, smelters were reluctant to sell at low prices. Quotations for secondary refined lead against the SMM #1 lead average price ranged from discounts of 50 yuan/mt to premiums of 30 yuan/mt ex-works. Some large discount sources (e.g., discounts of 100 yuan/mt) had narrowed their quoted discounts.

Inventory: As of September 10, LME lead inventory decreased by 2,325 mt to 237,000 mt; SHFE lead ingot warrant inventory totaled 53,689 mt, down 131 mt from the previous day.

Today's lead price forecast:

In September, the pattern of weak supply and demand in the domestic lead market remains unchanged. Although LME lead inventory in overseas markets continues to decline, the LME cash-3M contango is large, still maintained at -$44/mt. In mid-to-late September, maintenance at primary lead smelters progressed in the domestic market, with lead inventories at some enterprises already declining, easing the pressure on spot lead shipments. Meanwhile, scrap prices fluctuated and fell, narrowing losses in secondary lead production. In the short term, lead prices are expected to continue consolidating, awaiting new influencing factors.

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