Futures:
On Monday, August 31, the LME was closed for the UK Summer Bank Holiday, with trading resuming on Tuesday, September 1.
Overnight, the SHFE lead 2610 contract opened lower and drifted lower in the night session, opening at 16,300 yuan/mt before quickly falling to a low of 16,040 yuan/mt. It then consolidated at lows between 16,035-16,112 yuan/mt, ultimately closing at 16,075 yuan/mt, down 295 yuan/mt or 1.80% from the previous trading day's closing price. Night session volume totaled 46,945 lots, with open interest at 69,374 lots, down 944 lots. With the LME closed, there was no overnight guidance from overseas markets, and SHFE lead weakened independently.
On the macro front:
Overseas, the market continued to digest Fed Chairman Warsh's hawkish remarks from last week, and the US dollar index drifted lower, closing down 0.27% at 99.41. The Middle East situation remained volatile, with Trump saying he would strike Iran hard, while Iran indicated it would honor the memorandum of understanding if the US fulfilled its obligations. A Saudi oil tanker was intercepted in the southern shipping lane of the Strait of Hormuz, heightening supply disruption concerns. Crude oil opened higher and rallied, with WTI closing up 3.19% at $85.40/bbl. Overnight, the three major US stock indices closed lower, with the Dow down 0.7%, the S&P 500 down 0.33%, and the Nasdaq down 0.12%. European stocks mostly pulled back, with Germany's DAX down 1.17% and the Euro Stoxx 50 down 1.01%. Spot gold consolidated at lows near its two-week low, edging down 0.12%.
China's August manufacturing PMI came in at 49.8%, up MoM, indicating marginal improvement in manufacturing sentiment. Ministry of Finance data showed that total profits of state-owned enterprises from January to July reached 2.50899 trillion yuan, up 0.6% YoY. The Ministry of Commerce and six other departments issued implementation guidelines to promote the expansion and upgrading of commodity consumption, proposing that total retail sales of consumer goods will reach around 60 trillion yuan by 2030. Yesterday, the three major A-share indices opened lower before rebounding, with the Shanghai Composite closing up 0.86%, though nonferrous metals, gold, and mainland property sectors led the declines.
Today, key data to watch include China's August Caixin manufacturing PMI at 9:45, eurozone CPI at 17:00, Fed's Barkin's speech at 21:05, and the US August ISM manufacturing PMI at 22:00.
Spot fundamentals:
Yesterday, SMM #1 lead prices rose 75 yuan/mt. For primary lead, SHFE lead continued to strengthen. Affected by heavy maintenance among delivery brand smelters and low in-factory inventory at smelters, domestic lead supply was limited with few warrant quotes. Suppliers sold as available and generally maintained small premiums, with mainstream production areas shipping at premiums of 0-50 yuan/mt over the SMM #1 lead average price. For secondary lead, smelters showed moderate willingness to ship, and secondary refined lead discounts widened to 150-50 yuan/mt on an ex-works basis. Downstream, enterprises were wary of high prices and showed reduced interest in inquiries, mainly relying on long-term contracts and purchasing as needed. Although orders for finished lead-acid batteries improved somewhat, high prices dampened purchasing enthusiasm, spot order transactions were subdued, and overall trading showed no significant improvement yet.
Inventory: As of August 31, SMM lead ingot social inventory across five regions totaled 70,900 mt, down 3,800 mt from August 24 but up 1,600 mt from August 27. SHFE lead ingot warrant inventory totaled 57,643 mt, up 703 mt from the previous trading day. LME was closed, with LME lead inventory maintained at 406,250 mt.
Today's lead price forecast:
Overnight, SHFE lead fell sharply. Spot inventory accumulated marginally, and downstream buyers were cautious amid high prices, leaving lead prices encountering resistance. However, maintenance at delivery brands, low factory inventories, and limited domestic supply prompted suppliers to hold prices firm, providing support on the downside. Spot lead prices are expected to retreat from highs today, but the decline will be limited by suppliers' firm pricing, with overall prices consolidating on a subdued note in the high range. Attention should be paid to the 16,000 level, LME lead trends after the market reopens, and the sustainability of suppliers' firm pricing.
![[SMM Analysis: Intensive Maintenance at Smelters to Widen September's Primary Lead Production Decline]](https://imgqn.smm.cn/usercenter/mfCMp20251217171721.jpeg)
![[Delivery brand enterprises undergo intensive maintenance, September primary lead production expected to see a larger decline [SMM analysis]]](https://imgqn.smm.cn/usercenter/xVUpr20251217171722.jpg)
