Domestic and Overseas Lead Inventories Decline, Short-Term Lead Prices Hold Up Well [SMM Lead Morning Meeting Minutes]

Futures:

Last Friday, LME lead opened at $2,015/mt, hovering at highs during the Asian session, mostly fluctuating between $2,015-2,020/mt. In the late night session, the US dollar index rose, causing LME lead to erase most of its gains and nearly fall below the $2,000 psychological level, eventually closing at $2,009/mt, down 0.35%.

Last Friday, the most-traded SHFE lead 2601 contract opened at 17,340 yuan/mt. Boosted by lead ingot destocking, SHFE lead attempted to break through 17,400 yuan/mt at the opening but failed, mostly fluctuating around 17,350 yuan/mt in the latter half of the session. It gave back some gains by the close, ending at 17,305 yuan/mt, up 0.03%, with open interest falling 421 lots to 44,523 lots WoW.

On the macro front:

China's foreign reserves rose 0.09% MoM in November, with the central bank increasing gold holdings for the 13th consecutive month. The US Fed's favored inflation gauge, the core PCE index, rose 2.8% YoY in September, largely in line with expectations, while real personal spending stalled. The University of Michigan survey showed US consumer confidence ended four consecutive months of decline, with short-term inflation expectations falling to year-to-date lows. "Shadow Fed Chairman" Hassett stated it is a good time for cautious interest rate cuts again, expecting the Fed to act next week; he supported Besant and proposed residency requirements for regional Fed presidents. The White House's 2025 National Security Strategy marked a major shift, prioritizing the "Western Hemisphere first," abandoning global hegemony, adjusting economic relations with China based on "reciprocity and equality," and acknowledging near parity between the US and China; the US Defense Secretary stated the Monroe Doctrine is "stronger than ever."

:

In the lead spot market last Friday, spot lead supply in Jiangsu, Zhejiang, and Shanghai was limited, with few supplier quotations. Some warrant cargo was quoted at a premium (against the SHFE lead 2601 contract), while most other supply consisted of smelter ex-works lead ingots. Due to maintenance at east China smelters, regional lead ingot supply tightened, with mainstream origin quotations at premiums of 0-50 yuan/mt against the SMM #1 lead average price ex-works. For secondary lead, smelters' sales enthusiasm improved, with quotations at discounts of 125-0 yuan/mt against the SMM #1 lead price ex-works. Downstream enterprises mostly procured via long-term contracts, maintaining a wait-and-see attitude toward spot orders.

Inventory: As of December 5, LME lead inventory fell 4,500 mt to 199,600 mt; SHFE lead ingot weekly total inventory was 34,735 mt, down 3,064 mt WoW.

Today's lead price forecast:

Recently, domestic lead ingot regional supply tightened, lead consumption improved relatively, and visible inventory fell to a 15-month low, supporting lead prices to hold up well. However, it is noteworthy that lead smelter in-factory inventory has recently accumulated, and suppliers may ship to delivery warehouses for inventory transfer before delivery, raising vigilance against the risk of lead prices pulling back after a surge.

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.