Lead Ingot Supply Expected to Increase, Tight Spot Cargo Supply May Ease Relatively [SMM Lead Morning Meeting Minutes]

Futures:

Overnight, LME lead opened at $1,997/mt, fluctuated downward during the Asian session; it touched a low of $1,984.5/mt during the European session and finally closed at $1,999/mt, down 0.03%.

Overnight, the most-traded SHFE lead 2511 contract opened at 17,085 yuan/mt, touched a high of 17,100 yuan/mt at the beginning of the session, then fluctuated downward, touched a low of 17,035 yuan/mt, and finally closed at 17,095 yuan/mt, down 0.18%.

On the macro front:

Fed Chairman Powell: Policy rates remain slightly restrictive but allow the Fed to better respond to potential economic developments; expects tariffs to be a one-time pass-through effect; decisions are "absolutely not based on political factors." The "Fed Whisperer" noted that Powell's remarks indicate he believes interest rates are still tight, which may open the door for further rate cuts. Fed's Goolsbee: Not currently considering a 50-basis-point rate cut. The final Fed rate is likely to stabilize around 3%; Governor Bowman: Expects a total of three rate cuts in 2025; Bostic: Believes the current actual neutral rate is 1.25%; may support setting an inflation target range of 1.75% to 2.25% at some stage in the future.

Foreign Minister Wang Yi met with a delegation of US House of Representatives members: This visit can be called an ice-breaking trip. Head-of-state diplomacy plays an irreplaceable and important leading role. The current stabilization of China-US relations is hard-won and should be cherished; NPC Standing Committee Chairman Zhao Leji also met with the delegation of US House of Representatives members.

:

SHFE lead showed a fluctuating pullback trend. Suppliers refused to budge on prices and sold goods, mostly quoting at small premiums. In addition, cargoes self-picked up from primary lead production sites for the current month decreased. Some suppliers pre-sold October cargoes. Quotations from mainstream producing areas against the SMM #1 lead average price were at discounts of 25 yuan/mt to premiums of 100 yuan/mt ex-works. For secondary lead, tax-included quotations varied widely. Quotations for secondary refined lead against the SMM #1 lead average price were at discounts of 180-0 yuan/mt ex-works, while tax-excluded prices in the North China market began to weaken. Downstream enterprises maintained on-demand restocking before the holiday, but acceptance of some high-priced goods was poor. Some large-discount cargoes saw certain transactions.

Inventory: On September 23, LME lead inventory decreased by 100 mt to 219,975 mt; as of September 22, the total social inventory of lead ingots in five regions tracked by SMM fell to 54,700 mt, down 12,900 mt from September 18.

Today's lead price forecast:

Primary lead side, smelters resumed production after maintenance, coupled with the re-entry of delivery cargoes from last week into the circulation market, the tightness of spot supply may ease relatively. Secondary lead side, smelters advanced production resumptions, supplemented by imported crude lead, expectations for secondary lead enterprises to resume production increased, but it still takes some time for production resumptions to contribute to output. Overall, before the National Day holiday, downstream enterprises still have certain stocking demand. Coupled with the current low inventory at smelters, primary lead is expected to be sold with prices holding firm. Meanwhile, due to regional supply differences, the price spread of refined lead has widened by region, and transactions at a premium (to the SMM #1 lead average price) have decreased. In summary, lead prices may continue to fluctuate.

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