Pre-Holiday Stockpiling Gradually Commences Ahead of National Day, Lead Prices Fluctuate Rangebound [SMM Lead Morning Meeting Minutes]

Futures:

Overnight, LME lead opened at $2,005/mt, dipped to a low of $1,991/mt during the Asian session, fluctuated upward to a high of $2,011.5/mt during the European session, and finally closed at $2,006.5/mt, up $5/mt or 0.25%. Overnight, the most-traded SHFE lead contract opened at 17,075 yuan/mt, rose slightly to a high of 17,105 yuan/mt, then moved sideways before pulling back near the daily moving average near the close, and finally settled at 17,070 yuan/mt, down 10 yuan/mt or 0.06%.

On the macro front, US August retail sales grew more than expected, and the US dollar index strengthened briefly. Trump again pressured Powell on social media to cut interest rates immediately. China's August unemployment rate rose, while industrial value-added above the designated size increased YoY.

Spot fundamentals:

Spot fundamentals: Chihong and Honglu lead in the Shanghai market were quoted at parity against the SHFE lead 2510 contract; JCC and Jijin lead in the Jiangsu-Zhejiang market were quoted at parity against the SHFE lead 2510 contract. SHFE lead hovered at highs, but lacked upward momentum. Suppliers quoted prices in line with the market, and as cargoes had not flowed into the market after delivery, some suppliers quoted relatively firm prices. Downstream enterprises continued to wait and see, mainly purchasing via long-term contracts, while spot orders were temporarily suspended or opted for lower-priced secondary lead. Cargoes self-picked up from primary lead smelters were also limited, as smelters mainly fulfilled long-term contracts, with few spot quotations. Quotations for mainstream origin cargoes self-picked up from production sites ranged from discounts of 50 yuan/mt to premiums of 100 yuan/mt against the SMM #1 lead average price ex-works. In the secondary lead sector, smelter quotations still showed regional differences, with secondary refined lead quotations ranging from discounts of 120 yuan/mt to premiums of 50 yuan/mt against the SMM #1 lead average price ex-works.

Inventory: As of September 16, LME lead inventory increased by 2,225 mt to 227,850 mt; as of September 15, SMM lead ingot social inventory across five regions totaled 68,900 mt, up 1,200 mt from September 8 and up 1,900 mt from September 11.

Today's lead price forecast:

In mid-to-late September, refined lead maintenance expectations materialized, while battery manufacturers, mainly in the domestic market, are expected to maintain stable operating rates, and pre-holiday stockpiling for the National Day holiday has gradually begun. Although downstream operating rates improved marginally, lead prices strengthened this week, leading to widespread cautious wait-and-see sentiment. Some battery enterprises concentrated on stockpiling at low prices last week and are mainly digesting raw material inventory this week. On the macro front, expectations for US Fed interest rate cuts, coupled with moderate support from lead market fundamentals, may lead lead prices to continue fluctuating at highs.

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