Lead Prices Fluctuate at Highs, Stay Alert to the Drag of Fundamentals on Lead Prices [SMM Lead Morning Meeting Minutes]

Futures:

Overnight, LME lead opened at $2,067.5/mt. During the Asian session, it touched a low of $2,062.5/mt and then fluctuated upward. Entering the European session, boosted by optimism over a potential end to the US government shutdown and LME lead destocking, LME lead maintained a firm upward trend, hitting a high of $2,097/mt, and finally closed at $2,093/mt, up $25/mt or 1.21%, marking a five-day winning streak.

Overnight, the most-traded SHFE lead 2512 contract opened at 17,605 yuan/mt. At the beginning of the session, it touched a low of 17,575 yuan/mt. Subsequently, due to short-covering, SHFE lead fluctuated upward, reaching a high of 17,730 yuan/mt, and finally closed at 17,715 yuan/mt, up 140 yuan/mt or 0.80%, recording a two-day winning streak, but remained under pressure near the upper Bollinger Band.

On the macro front:

US House Majority Leader Scalise revealed that the House will hold a full vote on a bill to end the government shutdown at 8:00 Beijing Time on the 13th. Atlanta Fed President Bostic unexpectedly announced his retirement effective February next year, and reiterated his hawkish stance hours later. The market is optimistic about a dovish successor under the Trump administration.

Chinese Vice Premier He Lifeng met with leaders of the National Committee on US-China Relations, stating that China and the US should jointly maintain and implement the important consensuses and outcomes of the leaders' meeting, and promote the stable development of China-US economic and trade relations. China Securities Regulatory Commission: Overseas investors hold A-shares with a market value exceeding 3.5 trillion yuan.

:

In the Shanghai market, Chihong Zn & Ge lead was offered at 17,505-17,585 yuan/mt, at a premium of 0-50 yuan/mt against the SHFE lead 2512 contract. As SHFE lead continued to consolidate at high levels, warrant cargo offers in the Jiangsu, Zhejiang, and Shanghai markets were scarce, with some still quoted at a premium and others awaiting delivery. Meanwhile, primary lead cargoes self-picked up from the production site were quoted at a small premium. However, downstream enterprises showed limited inquiry enthusiasm, with only some making just-in-time procurement, leading to thin trading in the spot market. Offers for spot orders of secondary refined lead changed little, and suppliers' willingness to sell was moderate. The mainstream prices for spot orders were at a discount of 50-0 yuan/mt against the SMM #1 lead average price, with some cargoes from remote areas at a discount of 100 yuan/mt. The mainstream ex-factory offers excluding tax were 15,950-16,050 yuan/mt.

Inventory: On November 12, LME lead inventory decreased by 1,500 mt to 225,225 mt. According to SMM, as of November 10, the total social inventory of lead ingots across five regions tracked by SMM reached 32,700 mt, up 2,500 mt from November 3 and increasing by over 900 mt from November 6.

Today's lead price forecast:

This week is the week before the SHFE lead delivery, during which invisible inventory is expected to transform into visible inventory. Secondary lead smelters are ramping up production after resuming operations, and spot order supply is gradually increasing; additionally, imported lead negotiated last month is arriving at ports successively, leading to a gradual easing of lead ingot supply in the short term. The off-season for two-wheeled e-bike lead-acid battery consumption has arrived, with downstream operating rates declining. Currently, the SMM lead-acid battery weekly operating rate fluctuates below 70%. Downstream demand is gradually weakening, and recently, lead-acid battery producers have shown low purchase willingness for lead ingot spot orders, only maintaining essential restocking. Overall, there are multiple bearish factors for lead prices, warranting caution against the drag from fundamentals on 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, for reference only and not constituting decision-making advice.