Downstream Enterprises Primarily Purchase Through Long-Term Contracts, Lead Ingot Supply May Gradually Ease [SMM Lead Morning Meeting Minutes]

Futures:

Overnight, LME lead opened at $2,046/mt, touched a low of $2,043/mt during the Asian session. As LME lead inventory is currently at a low level in nearly eight months, LME lead held up well; it rose first then fell during the European session, gained before the close and touched a high of $2,064/mt, up $11.5, or 0.56%, recording a three-day winning streak.

Overnight, the most-traded SHFE lead 2512 contract opened high at 17,505 yuan/mt, fluctuated slightly below the daily average line to a low of 17,480 yuan/mt at the beginning of the session. It rose to a high of 17,575 yuan/mt as bears reduced their positions, then pulled back slightly before the close, and finally closed at 17,525 yuan/mt, up 20 yuan/mt, or 0.11%, recording a two-day winning streak.

On the macro front:

US House Speaker Johnson expected the House to reconvene early this week, stating that he would not commit to a vote on Affordable Care Act subsidies and hoped for a full House vote on the funding bill on Wednesday. Senate Republican Leader Thune said an agreement was finalised to ensure that the government shutdown-related agreement could pass the Senate at 11:00 am Beijing Time on the 11th. San Francisco Fed President Daly: Policymakers need to remain open to further interest rate cuts; St. Louis Fed President Musalem urged caution in cutting rates and predicted a significant economic rebound in the first quarter of next year.

China's General Office of the State Council issued Several Measures on Further Promoting the Development of Private Investment. CPCA: Wholesale sales of passenger NEVs in October reached 1.621 million units, up 18.5% YoY.

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SHFE lead held up well, while warrant circulation cargoes were limited, suppliers held prices firm for shipments. Meanwhile, offers for cargoes self-picked up from primary lead smelters' production sites eased slightly, with some premiums lowered. Downstream enterprises mainly made just-in-time procurement and purchased based on long-term contracts. Supply in North China gradually eased, and the price spread between primary lead and secondary lead widened compared with Central China.

Inventory: On November 10, LME lead inventory fell 1,500 mt to 202,200 mt. According to SMM, as of November 10, the total social inventory of lead ingots in five regions tracked by SMM stood at 32,700 mt, up 2,500 mt from November 3 and up more than 900 mt from November 6.

Today's lead price forecast:

This week is the week before the delivery of the SHFE lead 2511 contract. Suppliers gradually transferred lead ingots for delivery to social warehouses, and social inventory of lead ingots continued to increase. Based on the current open interest of the SHFE lead 2511 contract, the quantity of lead ingots expected to be delivered is around 15,000 mt, while the current social inventory of lead ingots has exceeded 30,000 mt, which is more than sufficient to complete the delivery. By mid-November, domestic lead ingot supply had gradually recovered, and imported lead continued to arrive at ports, with some going directly to downstream enterprises. As the delivery date for SHFE lead approaches, a certain volume of lead ingots in transit is expected to arrive at warehouses. Social inventory of lead ingots is projected to show an upward trend before delivery, raising caution about a potential retreat after rapid rise in lead prices.

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