Spot Lead Shows Strong Resilience in the Short Term as Pre-Holiday Stockpiling Exceeds Expectations [SMM Lead Morning Meeting Minutes]

Futures:

Overnight, LME lead opened at $2,003.5/mt. At the beginning of the session, SHFE lead weakened, hitting a low of $1,988/mt. Subsequently, LME lead gradually recovered its losses, especially after lead inventory declined again during the European session, rebounding to around $2,000/mt. However, it failed to reclaim that level and finally closed at $1,997/mt, down 0.22%.

Overnight, the most-traded SHFE lead 2511 contract opened at 16,880 yuan/mt. The decline in lead prices during the day stimulated further purchases by downstream users. Pre-holiday lead inventory continued to draw down, and SHFE lead reversed its daytime weakness, recovering most of the losses, but failed to touch the 17,000 yuan/mt mark, finally closing at 16,950 yuan/mt, down 0.09%. Its open interest decreased by 3,644 lots to 45,153 lots compared with the previous trading day.

On the macro front:

National Development and Reform Commission (NDRC): The total scale of the new-type policy financial tool is 500 billion yuan, all of which will be used to supplement project capital and support private enterprises and others to deeply participate in the "AI+" initiative. After a record-breaking rally, the value of US gold reserves touched $1 trillion. Trump said Israel agreed to a "20-point plan" to end the Gaza conflict, with the shekel rising nearly 2% intraday; a senior Hamas official said they had not received the plan. Qatar said it received an apology from the Israeli Prime Minister, who pledged not to launch attacks similar to the Doha incident against Qatar.

:

In the lead spot market yesterday, SHFE lead unexpectedly plummeted, leading to strong wait-and-see sentiment. Meanwhile, most suppliers had sold out their pre-holiday inventory and were pre-selling production during the holiday period, resulting in relatively firm quotations. In the Jiangsu, Zhejiang, and Shanghai regions, offers were at premiums of 30 yuan/mt against the SHFE lead 2510 contract or at parity with the SHFE lead 2511 contract. Mainstream origin offers were at premiums of 0-80 yuan/mt against the SMM #1 lead average price ex-works. Most downstream enterprises completed pre-holiday stockpiling this week. After the decline in lead prices, inquiries from some downstream enterprises increased, and some purchase deals were concluded, including for supplies during and after the holiday.

Inventory: As of September 29, LME lead inventory decreased by 600 mt to 218,825 mt. The total social inventory of lead ingots in five regions tracked by SMM fell to 42,100 mt, down 12,700 mt from September 22 and down 4,300 mt from September 25.

Today's lead price forecast:

As the National Day & Mid-Autumn Festival holidays approach, downstream enterprises are conducting the final round of pre-holiday stockpiling of lead ingots. Meanwhile, secondary lead enterprises in Anhui have not resumed operations after maintenance, leading downstream enterprises to consume lead ingot inventories from surrounding warehouses. Social warehouse inventories of lead ingots in regions such as Jiangsu, Zhejiang, and Shanghai declined further. With less than one day remaining until the holiday, pre-holiday procurement by downstream enterprises is expected to conclude. After active pre-sales by lead smelters, spot lead inventory is also relatively low. Additionally, today's significant drop in lead prices may spur some downstream enterprises to consider new bargain-hunting stockpiling intentions. In the short term, spot lead demonstrates strong resilience. Furthermore, during the National Day holiday, many lead-acid battery enterprises have planned holidays, which will result in a lack of lead consumption. Coupled with the gradual arrival of imported lead at ports in October, the risk of lead ingot inventory buildup after the holiday is increasing.

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, and are for reference only, not constituting decision-making advice.