Bullish and Bearish Factors Intertwined, Pre-Holiday Downstream Stockpiling Expected to Keep Lead Prices Fluctuating at Highs [SMM Lead Morning Meeting Minutes]

Futures:

Last Friday, LME lead opened at $2,015/mt, fluctuated upward during the Asian session, then rose to a high of $2,017.5/mt during the European session before fluctuating downward, touched a low of $1,991/mt toward the end of the session, and finally closed at $2,003/mt, down 0.79%.

On Friday night, the most-traded SHFE lead 2510 contract opened at 17,050 yuan/mt, touched a high of 17,170 yuan/mt at the beginning of the session, then fluctuated downward to a low of 17,110 yuan/mt, fluctuated rangebound toward the end of the session, and finally closed at 17,125 yuan/mt, up 0.12%.

On the macro front:

The Republican appropriations bill passed by the US House of Representatives failed to pass the Senate; to avoid a government shutdown, Democratic leaders in Congress called for a meeting with Trump as soon as possible. US Fed Governor Milan: believes that interest rate cuts will continue in the coming months and will work to convince other policymakers to cut rates faster; Minneapolis Fed President Kashkari: two more rate cuts this year are appropriate. ECB President Lagarde: the ECB has reached its inflation target, but uncertainties remain; Governing Council member Scicluna: current interest rate levels are appropriate, and the central bank is capable of dealing with downside risks; Governing Council member Stournaras: current interest rates are in a good balance, and no further easing is needed. Chinese President Xi Jinping spoke with US President Trump on the phone. Chinese Premier Li Qiang met with a US House of Representatives delegation. PBOC: starting from the 19th, the 14-day reverse repo operations in the open market will be adjusted to fixed quantity, interest rate bidding, and multiple price awards, with the operation time and scale to be determined based on liquidity management needs.

:

SHFE lead continued to consolidate and fluctuate, and due to the limited availability of circulating cargoes in the market, suppliers refused to budge on prices when selling, especially for cargoes self-picked up from electrolysis lead smelters, where the discounts against the SMM #1 lead average price narrowed significantly. Quotations from mainstream production areas were at premiums of 0-150 yuan/mt against the SMM #1 lead average price ex-works, and except for some remote areas, discounted cargoes were hard to find in mainstream production areas. For secondary lead, regional supply differences persisted, with secondary refined lead quotations against the SMM #1 lead average price ranging from discounts of 170 yuan/mt to premiums of 25 yuan/mt ex-works. Downstream enterprises maintained just-in-time procurement, mainly purchasing cargoes self-picked up from smelters, and some downstream companies had already made advance purchases and were scheduling shipments gradually. The spot market saw few cargoes and few transactions.

Inventory: On September 19, LME lead inventory fell by 2,375 mt to 220,300 mt; as of September 18, SMM lead ingot social inventory across five regions totaled 67,600 mt, down 1,300 mt from September 15.

Today's lead price forecast:

This week is the week before the National Day holiday, and downstream enterprises still have expectations of pre-holiday stockpiling. At the same time, primary lead smelters resumed production after maintenance, secondary lead losses were repaired, some enterprises planned to resume production, and a small amount of imported lead is expected to arrive in China around month-end. Overall, bullish and bearish factors are intertwined. Considering that lead ingot inventory buildup is unlikely before the holiday, lead prices are expected to hover at highs.

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