Lead Ingot Inventory Still Expected to Decline, Pre-Holiday Lead Prices May Hover at Highs [SMM Lead Morning Meeting Minutes]

Futures:

Overnight, LME lead opened at $1,999/mt, fluctuated downward during the Asian session to hit a low of $1,991.5/mt, rebounded during the European session to reach a high of $2,003.5/mt, and gave up some gains before closing at $1,999.5/mt, down 0.17%.

Overnight, the most-traded SHFE lead 2511 contract opened high at 17,190 yuan/mt, pulled back and fluctuated around 17,165 yuan/mt, with a low of 17,145 yuan/mt, and finally closed at 17,165 yuan/mt, up 0.03%.

On the macro front:

On Monday, the US dollar index first rose and then fell as investors reassessed the US Fed's interest rate cuts and future plans. US Fed's Bostic: There is not much reason to cut interest rates further now, expecting only one rate cut this year; Musalem: Limited room for further rate cuts. Would not support further rate cuts if inflation risks increase; Harker: Should be very cautious in removing policy restrictions, my estimate of the neutral rate is among the higher ones; Mian: Believes the appropriate interest rate is in the middle range of 2%. Does not currently support adjusting the 2% inflation target.

Vice Premier He Lifeng met with a US Congressional delegation and pointed out that China and the US should follow the important consensus of the heads of state call to promote stable, healthy, and sustainable development of bilateral economic and trade relations. CSRC Party Committee: Deepen reforms of the STAR Market, ChiNext, and Beijing Stock Exchange, improve systems and mechanisms such as IPO listing; further improve the full-chain regulatory system of "access-continuous supervision-exit". SSE Party Committee: Greater efforts to promote medium and long-term funds entering the market, continuously stabilize and activate the capital market. PBOC Governor Pan Gongsheng: Regarding the content of the "15th Five-Year Plan" and next steps for financial reform, further communication will follow after unified central deployment; regarding US Fed interest rate cuts, China's monetary policy adheres to prioritizing domestic conditions while considering internal and external balance.

:

SHFE lead hovered at highs, suppliers quoted following the market, and with limited circulating cargoes, some quotations were firm. Meanwhile, premiums for electrolysis lead cargoes self-picked up from production site for future delivery (during the National Day holiday in October) widened slightly, with mainstream origin quotations against the SMM #1 lead average at discounts of 25 yuan/mt to premiums of 130 yuan/mt ex-works. Secondary lead side, quotations varied significantly, with secondary refined lead quotations against the SMM #1 lead average at discounts of 180-0 yuan/mt ex-works. Downstream enterprises made purchases as needed before the holiday, with moderate inquiry enthusiasm, procuring both current spot cargoes and lead ingots for delivery at month-end and during the National Day holiday. Cargoes self-picked up from production site saw better transactions than warrant cargoes, and premium cargoes were difficult to trade.

Inventory: On September 22, LME lead inventory increased by 1,375 mt to 221,675 mt; as of September 22, SMM's social inventory of lead ingots across five regions totaled 54,700 mt, down 12,900 mt from September 18.

Today's Lead Price Forecast:

As the National Day holiday approaches, downstream lead-acid battery enterprises have been conducting routine pre-holiday stockpiling of lead ingots, with relatively improved purchasing enthusiasm, especially among medium and large enterprises. Currently, most secondary lead smelters are under maintenance or have implemented production cuts, leading to tight regional supply of lead ingots in east China. Downstream enterprises prefer purchasing primary lead, including cargoes self-picked up from production sites and social warehouses. As of last week, cargoes self-picked up from primary lead production sites had significantly decreased after downstream stockpiling, and social warehouse inventory also saw a substantial reduction this week. With only one week left before the National Day holiday, some downstream enterprises still have certain stocking demand. Meanwhile, primary and secondary lead enterprises have gradually begun to resume production, but their contribution to current market supply is limited. Lead ingot inventory is expected to decline further before the holiday, and lead prices may hover at highs.

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