Futures:
Overnight, LME lead opened lower with a gap at $1,946.5/mt, moved rangebound around the daily moving average during the Asian session, briefly rose after entering the European session before extending its fluctuating trend, with its trading center shifting lower, and finally closed at $1,942/mt, down $4.5/mt or 0.23%. It recorded three consecutive negative closes.
Overnight, the most-traded SHFE lead 2601 contract opened lower with a gap at 16,825 yuan/mt, briefly rose above the daily moving average and fluctuated rangebound at the beginning of the session before slowly declining during the session, and then moved rangebound around 16,815 yuan/mt below the daily moving average. The trading center of SHFE lead shifted lower and found support at the lower Bollinger Band, finally closing at 16,825 yuan/mt, flat on the day or down 0.00%. It formed a doji.
On the macro front:
US seasonally adjusted non-farm payrolls increased by 64,000 in November, higher than expectations. Non-farm payrolls in October fell by 105,000 MoM, while the market expected a decline of 25,000. The US unemployment rate recorded 4.6% in November, the highest in four years. The Central Financial and Economic Affairs Commission stated that expanding domestic demand is the top priority task for next year, and next year should focus on structural changes in consumption, boosting consumption from both supply and demand sides; investment and consumption growth rates are expected to recover next year. The NDRC said it will vigorously enhance residents' willingness to consume and deeply implement special actions to boost consumption. It will strengthen anti-monopoly and anti-unfair competition law enforcement and judiciary.
:
Spot supply in circulation was limited in Jiangsu, Zhejiang, and Shanghai, suppliers' willingness to sell was average, and quotations were few. The trading center of SHFE lead shifted lower yesterday, finding support near 16,800 yuan/mt for a short time. Suppliers sold following the market, but the quoted discounts (against the SHFE lead 2601 contract) narrowed from the previous day. Quotations in mainstream regions were at discounts of 25 yuan/mt to premiums of 75 yuan/mt against the SMM #1 lead average price ex-works. In addition, secondary lead enterprises had low willingness to sell, with mainstream ex-works offers for secondary refined lead including tax at discounts of 50-0 yuan/mt against the SMM #1 lead average price. Downstream enterprises maintained purchasing as needed, some intended to purchase at lows, but due to the limited supply of secondary lead currently, transactions were average.
Inventory: On December 17, LME lead inventory increased by 15,975 mt to 268,450 mt. As of December 8, the total social inventory of lead ingots in 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:
Some primary lead smelters in east China that entered maintenance are expected to finish maintenance and resume production within this week. However, the lead market currently faces weakness in both supply and demand: Yesterday, Anhui initiated a Level II yellow alert for heavy pollution weather, simultaneously implementing mandatory pollution reduction measures. As a result, several large secondary lead smelters in the region cut production by 50%, leading to a contraction in secondary lead supply. Moreover, downstream battery producers generally hold a bearish outlook on future market trends, preferring to wait for lower prices before purchasing, resulting in overall weak purchase willingness and cautious stockpiling at this stage. It is expected that lead prices will continue to fluctuate at lows in the short term, and attention should be paid to the conventional stockpiling practices of downstream battery producers ahead of the New Year's Day holiday.
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 do not constitute decision-making advice.
