Primary Lead Holds Prices Firm & Secondary Refined Lead Discounts Widen, Lead Prices Under Pressure at High Levels [SMM Lead Morning Meeting Summary]

Futures:

Overnight, the LME lead 3M contract retreated after a rapid rise on September 9, opening at $1,912.5/mt. During Asian trading hours, it shot up to $1,919.0/mt, briefly piercing the upper Bollinger Band but failing to hold above it. From the European session onward, it consolidated lower, dipping to $1,904.5/mt before ultimately closing at $1,909.0/mt, down $6.0/mt or 0.31% from the previous trading day's closing price. The full-day trading range was $1,904.5-1,919.0/mt, with volume of 5,383 lots, open interest of 172,938 lots, and a modest increase of 109 lots.

Overnight, the SHFE lead 2610 contract opened the night session at 16,150 yuan/mt, quickly dipped after the open to a low of 16,055 yuan/mt, then consolidated higher to recover some losses, reaching a high of 16,160 yuan/mt before ultimately closing at 16,105 yuan/mt, down 80 yuan/mt or 0.49% from the previous trading day's closing price. Night session volume was 31,669 lots, open interest was 64,287 lots, with an increase of 1,940 lots.

On the macro front:

Overseas, the US dollar index fell for a third consecutive trading day on Wednesday, closing down 0.06% at 98.78. However, the US Treasury's $6 billion long-bond buyback failed to boost Treasuries, with the 10-year Treasury yield rising more than 5 bps to 4.849%, a nearly three-year high. On monetary policy, traders raised their bets on ECB and BoE rate hikes (expecting roughly 4 cumulative hikes by the end of 2027). Geopolitical disruptions pushed energy and precious metals higher: tensions in the Middle East remained elevated, with multiple locations in Iran's Sirik region shelled on the morning of the 10th. Iran said it would respond with escalation to US attacks while also listing conditions for a ceasefire. Brent crude broke above $100/bbl intraday for the first time since July 24, closing up 1.99% at $99.62/bbl, while WTI closed up 2.16% at $94.25/bbl. European natural gas prices broke above 80 euros per megawatt hour for the first time since 2023, reigniting inflation expectations. Tonight, watch for US initial jobless claims and August PPI at 20:30, with the core focus this week remaining Friday's US CPI.

In China, National Bureau of Statistics (NBS) data showed August CPI rose 0.8% YoY, with mild inflation. Yesterday, financial markets were generally stable, with the precious metals sector strengthening. The State Council Information Office will hold a press conference today at 15:00 as part of the "Launching the 15th Five-Year Plan" series, where officials from the PBoC, NFRA, CSRC, and SAFE will discuss the financial sector's implementation of the 15th Five-Year Plan and progress in building a financial powerhouse, followed by a Q&A session. Watch for statements related to capital markets.

Spot fundamentals:

Yesterday, SMM #1 lead prices rose 75 yuan/mt, with SHFE lead dipping before rebounding. Primary lead: Spot supply remained tight, with most suppliers holding prices firm and selling as available, and some pre-selling. Mainstream production-area primary lead EXW quotations were at premiums of 0-50 yuan/mt over the SMM #1 lead average price. Regional divergence persisted: circulating supply was limited in Henan and Hunan, some Hunan smelters remained under maintenance, and in-production enterprises held low inventory. Jiangxi and Anhui maintained premiums of 80-100 yuan/mt. Secondary lead: After lead prices rebounded, secondary lead smelters showed increased selling willingness and market quotations rose, but discounts on secondary refined lead widened. Mainstream production-area secondary refined lead was quoted at discounts of 100-0 yuan/mt to the SMM #1 lead average price EXW, with some as low as 175 yuan/mt. Downstream: Enterprises maintained purchasing as needed. Some had already restocked at low prices yesterday and turned to a wait-and-see stance today, while others mainly picked up goods under long-term contracts. Purchase willingness weakened compared with the previous day, and market transactions softened.

Inventory: As of September 9, LME lead inventory stood at 384,450 mt, down 600 mt from the previous trading day; SHFE lead ingot warrant inventory totaled 58,291 mt, up 549 mt from the previous trading day.

Today's lead price forecast:

Overnight, SHFE and LME both saw slight corrections, and SHFE lead added positions in the night session to pull back to the 16,000 level, with momentum for chasing higher prices weakening on the futures. In the spot market, tight primary lead supply and suppliers holding prices firm limited downside room, but widening discounts on secondary refined lead, downstream turning to a wait-and-see stance after restocking at low prices, and weakening transactions suggested insufficient support for rebounds. Today, spot lead prices are expected to face slight pressure at highs and consolidate on a subdued note, extending the consolidation pattern. Focus on SHFE-LME linkage, the 16,000 level for SHFE lead, and spot transaction follow-through.