Market Spot Orders Expected to Increase, Short-Term Lead Prices Maintain Fluctuating Trend [SMM Lead Morning Meeting Minutes]

Futures:

Overnight, LME lead opened at $2,059/mt, fluctuated downward during the Asian session, touched a low of $2,047/mt upon entering the European session before rebounding, hit a high of $2,067.5/mt towards the close, and finally settled at $2,067/mt, up $10.5/mt or 0.51%, marking a four-day winning streak.

Overnight, the most-traded SHFE lead 2512 contract opened at 17,485 yuan/mt, touched an initial low of 17,440 yuan/mt, then fluctuated upward all the way to a high of 17,570 yuan/mt due to short covering, pulled back slightly before the close, and finally settled at 17,520 yuan/mt, up 30 yuan/mt or 0.17%, forming a small bullish candlestick.

On the macro front:

On Tuesday, due to market concerns about deterioration in the US labour market, the US dollar index continued to decline and plunged significantly before the US market open, but recovered some losses during the US session, eventually closing down 0.12%. According to statistics from US Automatic Data Processing (ADP), the US private sector lost an average of 11,250 jobs per week in the four weeks ending October 25; Goldman Sachs estimates that US non-farm payrolls decreased by about 50,000 in October, which would be the largest drop since 2020.

China's National Development and Reform Commission (NDRC) held a symposium with private enterprises to solicit opinions and suggestions on the development of the service industry during the "16th Five-Year Plan" period. NDRC: 83 infrastructure REITs projects have been issued and listed, which are expected to drive total investment in new projects to exceed 1 trillion yuan. CAAM: In October, China's NEV sales accounted for more than 50% of total sales for the first time.

:

In the Shanghai market, Chihong Zn & Ge lead was offered at 17,465-17,530 yuan/mt, representing a premium of 0-50 yuan/mt against the SHFE lead 2512 contract. SHFE lead maintained a consolidating trend, with its price center slightly lower than the previous day. As the delivery date approaches, some suppliers are waiting for delivery, keeping warrant offers firm. However, offers for cargoes self-picked up from primary lead production sites pulled back, with premiums in some regions adjusted lower compared to the previous day. Overall offers for secondary refined lead were limited, with some enterprises holding few spot orders and reluctant to sell due to bullish views. The mainstream spot order discount price was 50-0 yuan/mt against the SMM #1 lead average price, with some remote supplies offered at a discount of 100 yuan/mt. The mainstream ex-factory offer excluding tax was 15,900-16,000 yuan/mt. Downstream enterprises generally purchased as needed, mainly fulfilling long-term contracts, resulting in sluggish spot order market transactions.

Inventory: On November 11, LME lead inventory increased by 24,525 mt to 226,725 mt. According to SMM, as of November 10, the total social inventory of lead ingots across five regions tracked by SMM rose to 32,700 mt, up 2,500 mt from November 3 and increasing by over 900 mt from November 6.

Today's Lead Price Forecast:

As the SHFE lead 2511 contract approaches delivery, suppliers have been transferring lead ingots for delivery to social warehouses, and the social inventory of lead ingots continues to increase. In addition, several large secondary lead smelters have resumed production in recent months. As the backlog of long-term contract deliveries from earlier periods is gradually completed, spot orders in the market are expected to increase. Furthermore, imported lead has been arriving at ports, with some going directly to downstream enterprises. Supply is gradually easing, while the expected decline in the operating rate of downstream battery producers due to the onset of the off-season for EV battery consumption may lead to weaker demand for lead ingot procurement. In summary, lead prices are expected to maintain a fluctuating trend in the short term, and caution is warranted against a continued pullback in lead prices.

Data Source Statement: Data not from public sources are processed by SMM based on public information, market communication, and SMM's internal database model, for reference only and not as decision-making advice.