Lead smelters resume production and cut production simultaneously, and SHFE lead continues to fluctuate at lows in the short term [SMM Lead Morning Meeting Minutes]

Futures:

Overnight, LME lead opened at $1,969.5/mt. It moved sideways above the daily moving average during the Asian session before fluctuating downward during the European session to a low of $1,939/mt. It rebounded slightly before the close, finally settling at $1,946.5/mt, down $19.5/mt or 0.99%, breaking below the five-day moving average and forming a large bearish candlestick.

Overnight, the most-traded SHFE lead 2601 contract opened lower with a gap at 17,015 yuan/mt. It fell sharply at the opening, breaking below the 17,000 yuan/mt psychological level, and fluctuated between 16,910 yuan/mt and 16,840 yuan/mt. It touched a low of 16,840 yuan/mt before the close. The price center moved lower but found support at the lower Bollinger Band, finally settling at 16,875 yuan/mt, down 195 yuan/mt or 1.14%, forming a small bearish candlestick with a bald head.

On the macro front:

The competition for the US Fed Chairman candidate intensified, as Kevin Hassett faced opposition from senior figures close to Trump over concerns about being too close to the former president. Japanese media reported that the Bank of Japan is expected to raise interest rates to 0.75%, the highest level in 30 years. Statistics bureau data showed that in November, total retail sales of consumer goods increased by 1.3% YoY; value-added industrial output of major enterprises increased by 4.8% YoY; the national urban surveyed unemployment rate was 5.1%; and new commercial residential housing prices in first-tier cities fell 0.4% MoM.

:

Lead ingot warrant cargoes were limited in the Jiangsu, Zhejiang, Shanghai region. Yesterday was the delivery day for the SHFE lead 2512 contract, so suppliers offered few quotations for warrant cargoes, instead actively selling cargoes for self-pickup from the production site. Quotations in mainstream areas against the SMM #1 lead average price were at discounts of 25 yuan/mt to premiums of 75 yuan/mt ex-works. Meanwhile, secondary lead enterprises sold cargoes following the market trend, with secondary refined lead quotations against the SMM #1 lead average price at discounts of 75-0 yuan/mt ex-works. Downstream enterprises purchased as needed, buying the dip, with some showing increased purchasing enthusiasm, though most maintained their purchasing-as-needed mode.

Inventory: On December 16, LME lead inventory increased by 17,725 mt to 252,475 mt. As of December 8, the total social inventory of lead ingots across five regions tracked by SMM 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:

The lead market recently saw intertwined bearish and bullish factors. Supply side, primary lead smelters were expected to resume production this week after previous maintenance, which may push social inventory to rebound. Meanwhile, the secondary lead market was in a stalemate due to falling lead prices: smelters lowered raw material procurement quotations, but raw material suppliers were reluctant to sell due to tight supply, causing some secondary lead enterprises to cut production due to insufficient raw materials, resulting in a weak supply-demand pattern. Overall, with supply recovery expectations countering cost support, lead prices are expected to continue fluctuating at lows in the short term. The market should monitor inventory changes and raw material circulation.

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. They are for reference only and do not constitute decision-making advice.