KDJ Line Gap Narrows, SHFE Lead Retreats After Rapid Rise [SMM Lead Morning News]

SMM December 30:

Overnight, LME lead opened higher with a gap at $2,002/mt, fluctuated rangebound above the daily average line during the Asian session, and hit a high of $2,028/mt before plummeting straight down. Entering the European session, the decline continued. After touching a low of $1,989/mt, LME lead stopped falling and rebounded due to bears reducing their positions, and finally closed at $2,009/mt, up $9.5/mt or 0.48%, marking a three-day winning streak. Overnight, the most-traded SHFE lead 2602 contract opened at 17,465 yuan/mt. At the beginning of the session, it fluctuated rangebound in a relatively small range above the daily average line. Affected by the broad decline in nonferrous metals, SHFE lead fluctuated downward all the way, touched a low of 17,330 yuan/mt, and finally closed at 17,380 yuan/mt, down 110 yuan/mt or 0.63%. The KDJ line gap narrowed, ending a five-day winning streak and forming a small bearish candlestick.

Recently, lead prices held up well. Coupled with the year-end period, suppliers actively cleared inventory and sold off goods, with some offering at large discounts, while downstream enterprises made purchases as needed, driving down the social inventory of lead ingots. However, the base level of lead ingot inventory in Jiangsu, Zhejiang, and Shanghai is relatively low, downstream purchasing is limited, and inventory changes are relatively small. Trading activity in the spot market is expected to be relatively weak before the New Year's Day holiday, and social inventory is expected to remain at low levels. Following the New Year's Day holiday, some downstream enterprises are expected to take holidays, while primary lead smelters resume production. The social inventory of lead ingots is expected to stop falling and rebound after the New Year's Day holiday, and caution is warranted against a potential retreat after a rapid rise in lead prices.

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