Domestic and Overseas Inventory Accumulation, Short-Term Lead Prices May Continue in the Doldrums [SMM Lead Morning Meeting Minutes]

Futures:

Overnight, LME lead opened at $2,060.5/mt. As the US dollar index strengthened, LME lead continued its previous fluctuating downward trend, consolidating around $2,025.5/mt. After entering the European session, LME lead inventory surged by over 40,000 mt, further pushing down the trading center of LME lead. The intraday low touched $2,035/mt, nearly erasing all gains since November. It finally closed at $2,038.5/mt, down 1.33%.

Overnight, the most-traded SHFE lead 2601 contract opened at 17,365 yuan/mt. Dragged down by the decline in LME lead and compounded by the accumulation of domestic visible inventory, SHFE lead also fell significantly. The intraday low reached 17,265 yuan/mt, erasing all gains since late October. It later found support at the 40-day moving average and finally closed at 17,275 yuan/mt, down 0.86%. Its open interest reached 74,069 lots, an increase of 516 lots from the previous trading day.

On the macro front:

The China-Germany high-level financial dialogue was held in Beijing, reaching multiple consensuses and ending trade tensions. The hot candidate for US Fed Chairman, Fed Governor Waller, supported an interest rate cut in December, while Fed Vice Chairman Jefferson emphasized cautious and gradual policy advancement.

:

In the lead spot market yesterday, the trading center of SHFE lead moved further downward. Additionally, as the SHFE lead 2511 contract was undergoing delivery today, some suppliers prioritized shipping to delivery warehouses, resulting in limited market quotations. Quotations in the Jiangsu, Zhejiang, and Shanghai region against the SHFE lead 2512 contract were at premiums of 0-50 yuan/mt. Furthermore, the discounts for primary lead cargoes self-picked up from production sites (against the SHFE lead 2512 contract) narrowed WoW, with individual discounts narrowing by nearly 100 yuan/mt. Downstream enterprises exhibited strong wait-and-see sentiment, with some making just-in-time procurement.

Inventory: As of November 17, LME lead inventory surged by 42,025 mt to 266,125 mt, with the main increases occurring in warehouses in Kaohsiung and Singapore. The total social inventory of lead ingots in five regions tracked by SMM reached 38,600 mt, an increase of 5,900 mt from November 10 and an increase of 3,700 mt from November 13.

Today's Lead Price Forecast:

Recently, lead consumption performance has been average. Production changes at primary lead and secondary lead enterprises were mixed. In north China, vehicle transport restrictions due to air pollution control and winter scrap undersupply led to output reductions at some secondary lead enterprises. Meanwhile, primary lead enterprises in east China resumed supply after maintenance, widening the supply disparity between the north and south regions. The growth rate of social lead ingot inventory is expected to slow down subsequently. Lead prices are likely to continue in the doldrums, awaiting new trading factors.

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