Fundamentals Remain Mediocre, Short-Term Lead Prices May Temporarily Enter Consolidation [SMM Lead Morning Meeting Minutes]

Futures:

Overnight, LME lead opened at $2,008/mt. With a lack of market-moving news, it fluctuated rangebound between $2,005/mt and $2,015/mt for an extended period. During the late-night session, the US dollar index strengthened, causing LME lead to fall below the $2,000/mt mark, hitting a low of $1,996/mt, and finally closing at $1,998.5/mt, down 0.52%.

Overnight, the most-traded SHFE lead 2601 contract opened at 17,310 yuan/mt. Amid a stalemate between bullish and bearish factors, SHFE lead fluctuated rangebound, but its trading center shifted lower compared to the previous day. It ultimately closed at 17,320 yuan/mt, down 0.03%. Open interest decreased by 70 lots to 43,037 lots compared to the previous trading day.

On the Macro Front:

The Political Bureau of the CPC Central Committee meeting stated that next year's economic work should adhere to the principles of seeking progress while maintaining stability, improving quality and efficiency, and leveraging the integrated effects of existing policies and incremental policies. It will continue to implement a more proactive fiscal policy and a moderately easy monetary policy, strengthen counter-cyclical and cross-cyclical adjustments, implement more proactive and effective macro policies, continuously expand domestic demand, optimize supply, improve incremental aspects, and revitalize existing assets. Separately, US former President Trump hinted in a post that the Supreme Court might overturn the "reciprocal tariff" but there is a "Plan B," and US companies are "scrambling" for "tax rebates."

:

In the lead spot market yesterday, spot supply remained effectively available in the Jiangsu, Zhejiang, and Shanghai markets. Suppliers actively sold cargoes self-picked up from production sites, with offered discounts widening to a discount of 120-50 yuan/mt against the SHFE lead 2601 contract upon ex-factory. Smelters' offers ranged from a discount of 50 yuan/mt to a premium of 50 yuan/mt against the SMM #1 lead average price upon ex-factory. While lead prices held up well, downstream enterprises only made just-in-time procurement or primarily accepted goods under long-term contracts, resulting in sluggish trading in the spot order market.

Inventory: As of December 8, LME lead inventory decreased by 3,725 mt to 239,825 mt. The total SMM lead ingot social inventory across five regions fell to 20,500 mt, down 10,200 mt from December 1 and down 3,200 mt from December 4, hitting a fresh 15-month low.

Today's Lead Price Forecast:

Currently, both primary lead and secondary lead smelters are undergoing maintenance or production cuts, leading to tight regional supply of lead ingots. Coupled with transportation distances and price advantages, some downstream enterprises' just-in-time procurement favors warehouse cargoes, further reducing lead ingot social warehouse inventory. However, it is worth noting that in-factory inventory at primary lead smelters operating normally has accumulated. As of last Thursday, the weekly in-factory lead ingot inventory at primary lead enterprises had risen above 10,000 mt. Subsequently, the decline in social lead ingot inventory may slow down, limiting the upside room for lead prices.

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