With coming SHFE lead delivery, beware of the risk of lead prices retreating after rapid rise [SMM Lead Morning Meeting Minutes]

Futures:

Overnight, LME lead opened at $2,037/mt, touched a low of $2,029.5/mt at the beginning of the session and fluctuated upward; it maintained an upward trend during the European session, touched a high of $2,056/mt before closing, and finally settled at $2,045/mt, up 0.42%.

Overnight, the most-traded SHFE lead 2511 contract opened higher with a gap at a low of 17,440 yuan/mt. It rose due to short covering, fluctuated rangebound around 17,490 yuan/mt during the session, reached a high of 17,510 yuan/mt, and finally settled at 17,470 yuan/mt, up 0.29%.

On the macro front:

Last Friday, the US dollar index first rose then fell due to uncertainty over the US Fed's outlook and the US government shutdown, once dropping to an intraday low of 99.38, and finally closed down 0.13%. The US Senate failed to advance a funding bill; Democrats proposed extending ACA subsidies for one year to end the government shutdown, but it was rejected by Republicans. Multiple sources revealed that several US Senate Democrats said last Sunday they were ready to advance a package of bills to end the government shutdown. The US November Michigan Consumer Sentiment index recorded 50.3, falling to its lowest level since June 2022, and the preliminary current conditions index recorded 52.3, a record low.

China's National Bureau of Statistics (NBS): In October, CPI turned to an increase of 0.2% YoY, and rose 0.2% MoM; PPI decreased 2.1% YoY. Ministry of Finance: Utilize and implement a more proactive fiscal policy effectively and continue to implement special actions to boost consumption. General Administration of Customs: In the first 10 months of 2025, China's goods trade continued steady growth, with total import and export value reaching 37.31 trillion yuan, up 3.6% YoY.

:

SHFE lead continued to hold up well. Suppliers quoted prices following the market trend. Trading of warrant cargoes was sluggish, while cargoes self-picked up from primary lead production sites were limited. Available supply in south China was limited, and transportation controls in north China persisted. Offers in mainstream producing areas were mostly at a premium of 0-100 yuan/mt against the SMM #1 lead average price. Downstream enterprises maintained purchasing as needed, with some purchasing based on long-term contracts.

Inventory: On November 7, LME lead inventory decreased by 1,800 mt to 244,125 mt. According to SMM, as of November 6, the total social inventory of lead ingots across five regions reached 31,800 mt, up 1,900 mt from October 30 and up 1,600 mt from November 3.

Today's lead price forecast:

Domestic SHFE lead: Primary lead and secondary lead smelters gradually resumed operations after maintenance, while downstream enterprises also relatively recovered after production cuts. Lead ingot supply and demand both increased. Coupled with the relatively small current lead ingot inventory base, lead prices are expected to hold up well. In addition, this week marks the week before the SHFE lead delivery, during which invisible inventory will be converted into visible inventory. Be cautious of the risk of lead prices retreating after a rapid rise.

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. They are for reference only and do not constitute decision-making advice.