Lead Prices Have Strong Support Below, Short-Term Trend May Rebound [SMM Lead Morning Meeting Minutes]

Futures:

Overnight, LME lead opened at $1,986/mt, moving sideways during the Asian session. Upon entering the European session, it touched a low of $1,975/mt before rebounding as bulls increased positions, pushing it to a high of $2,008/mt. It pulled back slightly towards the end of the session, finally settling at $1,999.5/mt, up $18.5/mt or 0.93%, forming a small bullish candlestick.

Overnight, the most-traded SHFE lead 2601 contract opened higher with a gap at 17,145 yuan/mt. The trading center of SHFE lead shifted upward; it fluctuated along the daily average line at the beginning of the session, touching a high of 17,230 yuan/mt. After a slight correction during the night, it fluctuated upward again, finding support at the 10-day moving average, and finally settled at 17,195 yuan/mt, up 110 yuan/mt or 0.64%, forming a small bullish candlestick.

On the macro front:

The US November ISM Manufacturing PMI was 48.2, missing the market expectation of 49 and marking the ninth consecutive month in contraction territory. Supported by expectations for US interest rate cuts and a weaker US dollar, spot gold rose to a six-week high, eventually closing up 0.37%. According to CCTV News: Chinese citizens can head to Russia visa-free before September 14, 2026. At the invitation of President Xi Jinping, French President Macron will pay a state visit to China from December 3 to 5.

:

SHFE lead was in the doldrums. Suppliers sold cargoes following the market trend; supply from some warehouses decreased, and quotations also decreased WoW. Meanwhile, smelters' sentiment to hold prices firm for cargoes self-picked up from production site eased, and quoted premiums were lowered, with offers at discounts of 20 yuan/mt to premiums of 100 yuan/mt against SMM #1 lead for ex-works delivery. In the secondary refined lead market, quoted discounts also widened. Offers from major producing areas were at discounts of 75-0 yuan/mt against the SMM #1 lead average price, with premium offers in a few regions. Downstream enterprises showed a strong wait-and-see sentiment, with some mainly purchasing via long-term contracts. Trading in the spot order market weakened.

Inventory: On December 1, LME lead inventory decreased by 2,300 mt to 260,875 mt. As of December 1, the total social inventory of lead ingots across five regions tracked by SMM fell to 30,700 mt, down 6,300 mt from November 24 and down 4,300 mt from November 27, dropping to a nearly one-month low.

Today's lead price forecast:

This week, primary lead smelters in regions such as Yunnan, Anhui, and Jiangxi were all under maintenance, leading to tight regional supply of lead ingots. Meanwhile, lead prices were in the doldrums, and lead smelters were reluctant to sell at low prices, while secondary lead enterprises also held prices firm for sales. Additionally, lead-acid battery enterprise production improved relatively in December, and they intended to build inventory when prices were low. Inventory in warehouses around lead consumption areas decreased to some extent, causing a further decline in social inventory of lead ingots. In December, primary and secondary lead enterprises experienced both maintenance and resumption of operations, but after offsetting the changes in production, there is still an expectation of a certain reduction in output. It is anticipated that, with downstream enterprises purchasing as needed, social lead ingot inventory will remain at low levels in the short term. Overall, lead prices have strong support at lower levels, and short-term trends may see some rebound.

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, and are for reference only, not constituting decision-making advice.