Post-holiday lead ingot inventory buildup is expected to be limited, and lead prices may fluctuate at highs [SMM Lead Morning Meeting Minutes]

Futures:

Overnight, LME lead opened at $2,010/mt. Due to the strengthening US dollar index, most nonferrous metals pulled back, and LME lead fluctuated downward throughout the day, even falling below the key $2,000/mt level at one point. It recovered some losses by the close, finally settling at $2,005.5/mt, down 0.02%.

Overnight, SHFE lead remained closed due to the National Day holiday, and trading resumed today.

On the Macro Front:

US Fed minutes: Most officials deemed continued easing this year appropriate, while a few might have supported holding rates steady in September. The US government shutdown exceeded one week with no resolution: The Senate rejected a bipartisan temporary funding bill for the sixth time. US Congressional Budget Office: The federal budget deficit for the last fiscal year was $1.8 trillion, nearly flat compared to fiscal year 2024.

In the lead spot market last week, SHFE lead hovered at highs. With the National Day holiday approaching, holiday sentiment prevailed in the lead market. Traders gradually suspended quotations for the holiday, downstream enterprises also paused purchases, and market activity was subdued. Some suppliers had sold out lead ingots for pre-holiday and holiday periods, while a few continued to offer post-holiday material at relatively firm premiums. Mainstream origin quotations against the SMM #1 lead average price were at premiums of 0–80 yuan/mt ex-works.

Inventory: As of October 8, LME lead inventory decreased by 625 mt to 236,075 mt; as of September 30, SHFE lead ingot weekly total inventory was 41,894 mt, down 7,315 mt from the previous week.

Today's Lead Price Forecast:

Following the National Day & Mid-Autumn Festival holidays, upstream and downstream enterprises in the lead industry chain gradually resumed work, and the spot market returned to normal trading. Pre-holiday production cuts by lead smelters, combined with pre-holiday stockpiling by downstream enterprises, pushed lead ingot inventories to a four-month low. Material for both the holiday period and post-holiday was pre-sold, so post-holiday inventory buildup is expected to be relatively small. Additionally, the lead import window opened in September, and some downstream or lead smelting enterprises pre-purchased imported lead ingots arriving in October. Going forward, attention should be paid to production resumptions at secondary lead enterprises and the arrival of imported lead. Until the supply increase materializes, lead prices are expected to fluctuate 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.