Fundamentals Show Both Bullish and Bearish Factors, Lead Prices May Await Macro Guidance [SMM Lead Morning Meeting Minutes]

Futures:

Last Friday, LME lead opened at $2,074.5/mt and fluctuated downward throughout the day. Although LME lead inventories declined during the European session, the decline in LME lead only paused briefly. After entering the night session, the overall trading center shifted downward again, and it finally closed at $2,066/mt, down 0.43%.

Last Friday, the most-traded SHFE lead 2601 contract opened at 17,520 yuan/mt. As domestic visible inventories accumulated as expected, the trading center of SHFE lead moved further down to around 17,500 yuan/mt, with the intraday low touching 17,440 yuan/mt. It found support at the 20-day moving average and finally closed at 17,465 yuan/mt, down 0.77%. Its open interest reached 77,760 lots, an increase of 1,551 lots from the previous trading day.

On the Macro Front:

Premier Li Qiang presided over a State Council executive meeting, deploying measures to enhance the supply-demand alignment of consumer goods and further promote consumption. The Ministry of Finance stated it would implement a proactive fiscal policy effectively and firmly, adhere to expanding domestic demand, and support building a strong domestic market. Additionally, hawkish voices within the US Fed were notable, with voting members for this year and next opposing a December interest rate cut, while others again called for rate cuts. As of last Friday, market expectations for a December rate cut had fallen to 40%.

:

In the lead spot market last Friday, SHFE lead rose initially then pulled back. Suppliers had basically finalized cargoes planned for delivery, while the willingness to sell other cargoes increased, leading to more quotations compared to the previous trading day. Quotations in the Jiangsu, Zhejiang, and Shanghai region against the SHFE lead 2512 contract were at premiums of 0-50 yuan/mt. Meanwhile, smelters showed slight differences in selling cargoes for self-pickup from production sites; some maintained premium quotations to deter buyers, while others lowered their discounts. Downstream enterprises purchased cautiously, with some still primarily relying on long-term contracts for procurement.

Inventory: As of November 14, LME lead inventories decreased by 1,500 mt to 222,475 mt; the weekly total inventory of SHFE lead ingots was 31,027 mt, an increase of 5,203 mt WoW.

Today's Lead Price Forecast:

The SHFE lead 2511 contract is expected to enter delivery today. The increase in visible inventory from deliveries remains, but the delivery volume in this round is lower than expected, and social inventory of lead ingots remains at a low level for nearly a year. In November, upstream and downstream enterprises in the lead industry chain began negotiations for long-term contracts for lead concentrates and lead ingots. The supply gap of raw materials like lead concentrates remains the main point of contention in long-term contract negotiations, which may support lead prices to hold up well. However, as short-term delivery factors fade and spot market circulation increases, the rise in lead prices may pull back relatively.

Data Source Statement: Except for public information, other data are processed by SMM based on public information, market communication, and SMM's internal database model, for reference only and do not constitute decision-making advice.