Macro Tailwinds Continue to Arrive, May Boost Short-Term Lead Price Rebound [SMM Lead Morning Meeting Minutes]

Futures:

Overnight, LME lead opened at $2,023/mt. During the Asian session, trading was relatively sluggish, with prices largely fluctuating between $2,020-2,025/mt. Upon entering the European session, LME lead rose sharply, approaching the previous day's high, buoyed by positive news from the meeting between the Chinese and US heads of state. However, due to limited fundamental support, it gave back some gains during the tail end of the session, ultimately closing at $2,022/mt, up 0.15%.

Overnight, the most-traded SHFE lead 2512 contract opened at 17,355 yuan/mt. At the start of trading, it quickly rallied, reaching a high of 17,475 yuan/mt, driven by the positive news from the Sino-US summit. Nevertheless, with underlying domestic fundamentals remaining weak, SHFE lead surrendered most of its gains during the latter part of the session, falling below 17,400 yuan/mt and finally settling at 17,375 yuan/mt, up 0.09%. Open interest reached 69,368 lots, increasing by 81 lots compared to the previous trading day.

On the macro front:

The Ministry of Commerce stated that the Chinese and US economic and trade teams reached consensus on outcomes in three areas. The US will cancel the so-called 10% "fentanyl tariff" imposed on Chinese goods (including those from the Hong Kong and Macao Special Administrative Regions). The 24% reciprocal tariff on Chinese goods (including those from the Hong Kong and Macao Special Administrative Regions) will continue to be suspended for one year. The US will suspend the implementation of its 50% ownership rule for export controls, announced on September 29, for one year. China will suspend the implementation of relevant export control measures announced on October 9 for one year and will study and refine specific plans. The US will suspend its Section 301 investigation measures targeting China's maritime, logistics, and shipbuilding industries for one year. Following the US suspension of relevant measures, China will correspondingly suspend its countermeasures against the US for one year. Separately, according to reports from CCTV correspondents, on October 30 US time, the US Senate passed a resolution with 51 votes in favor and 47 against, terminating the comprehensive tariff policy implemented globally by former US President Trump.

:

In yesterday's lead spot market, SHFE lead maintained a weak consolidation. Warrant supplies in the Jiangsu, Zhejiang, and Shanghai region were limited, leading to few quotations from suppliers, with some offers at premiums of 0-50 yuan/mt against the SHFE lead 2511 contract. Meanwhile, offers for primary lead cargoes self-picked up from production sites were moderate. In South China, offers shifted from premiums to discounts, with mainstream origin quotations at premiums of 0-100 yuan/mt against the SMM #1 lead price ex-works, while a few were reported at discounts of 30 yuan/mt ex-works. Additionally, secondary refined lead offers remained at discounts of 100-0 yuan/mt against the SMM #1 lead price ex-works. As spot lead prices pulled back, some downstream enterprises made purchases based on rigid demand, resulting in slightly better transactions for cargoes self-picked up from production sites.

Inventory: As of October 30, LME lead inventory decreased by 700 mt to 224,175 mt; SMM lead ingot social inventory across five regions totaled 29,800 10kt, down 2,100 10kt from October 23 and approximately 500 mt from October 27, hitting a new low since September 2, 2024.

Today's Lead Price Forecast:

Macro tailwinds continued to emerge, including the cancellation or extension of China-US tariffs and the US halting its comprehensive global tariff policy, which became new positive factors for lead prices. On the other hand, in terms of lead fundamentals, although social inventory of lead ingots remained low, in-factory inventory at smelters began to accumulate. Meanwhile, supply recovery and expectations of import arrivals exerted downward pressure on lead prices, limiting the room for a short-term rebound in lead prices.

Data Source Statement: Except for publicly available information, other data were 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.