Previous Positive Factors Exhausted, Short-Term Lead Prices Focus on Cost Support from Secondary Lead [SMM Lead Morning Meeting Minutes]

Futures:

Overnight, LME lead opened at $2,001.5/mt and fluctuated downward throughout the day. During the Asian session, it fell below $2,000/mt and gradually moved to $1,990/mt and $1,980/mt. Strengthening of the US dollar index further pressured LME lead, which hit a low of $1,975/mt during the session and finally closed at $1,976.5/mt, down 1.1%.

Overnight, the most-traded SHFE lead 2601 contract opened lower at 17,125 yuan/mt. Dragged down by the decline in LME lead and decreased trading activity in the domestic spot market, SHFE lead extended losses after opening, hitting a low of 17,015 yuan/mt and nearly breaking the 17,000 yuan/mt mark. It finally closed at 17,025 yuan/mt, down 1.22%, with open interest falling by 141 lots day on day to 40,479 lots.

On the macro front:

US ADP employment data recovered, with private enterprises adding an average of 4,750 jobs per week, ending four consecutive weeks of job losses. The US Fed focused on the October JOLTS job openings, which rose to a five-month high instead of falling, but hiring decreased and layoffs hit a more than two-year high. Bank of Japan Governor: Interest rates will be raised if the economic outlook is achieved, and bond purchases will be increased under special circumstances. The bank is gradually approaching the sustained inflation target, hinting at future rate hikes "more than once." In addition, US Trump: Interest rate cuts are the touchstone for the new Fed Chairman, and prices of some goods may be reduced by adjusting tariffs. This was Trump's first clear statement indicating a possible expansion of tariff relief.

:

In the lead spot market yesterday, the center of SHFE lead moved lower. Suppliers sold goods following the market trend. Due to relatively tight spot supply in Jiangsu, Zhejiang, and Shanghai, some quotations were at premiums. Meanwhile, quotations for primary lead cargoes self-picked up from production sites varied. Main producing regions quoted at premiums ranging from discounts of 40 yuan/mt to premiums of 100 yuan/mt against the SMM #1 lead average price. Downstream enterprises showed strong wait-and-see sentiment, with some intending to buy the dip as needed, but actual purchases were relatively cautious.

In terms of inventory: As of December 9, LME lead inventory fell by 2,900 mt to 193,725 mt; SHFE lead warrant inventory stood at 15,631 mt, up 100 mt from the previous trading day.

Today's lead price forecast:

Recently, domestic and overseas lead futures pulled back sharply, almost erasing all gains from the previous week. However, fundamentals saw no significant changes. Current domestic lead ingot social inventory is at a 15-month low, while LME lead inventory dropped below 200,000 mt. Maintenance at primary lead delivery brands in China persists. Although some lead smelters saw inventory buildup due to decreased purchasing enthusiasm from downstream enterprises, the overall inventory base remains relatively small. Subsequent attention will be on cost support conditions in the secondary lead sector following the decline in 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.