China lead ingot destocking while imported lead pressure approaches; lead prices are expected to consolidate at highs [SMM Lead Market Weekly Forecast]

         Next week coincides with the Mid-Autumn Festival holiday. Exchanges such as SHFE will not conduct night session trading on September 24 and will be closed on September 25. On the macroeconomic data front, the final University of Michigan US consumer sentiment index for September and the final one-year inflation expectations for September will be released. After the US Fed's rate hike outcome landed, the impact of macro factors on lead weakened.

For LME lead, with macro disturbances fully priced in, lead prices stopped falling and rebounded, but pressure remains high after the US dollar index broke above 100. Meanwhile, fundamentals in markets outside China remain lackluster, with LME lead inventory staying high, requiring changes driven by Chinese lead ingot imports. In the short term, LME lead's upside is limited and will maintain a consolidating trend. LME lead is expected to trade in a range of $1,890-1,925/mt.

For SHFE lead, next week is the week before the Mid-Autumn Festival holiday. After this week's substantial purchasing and stockpiling, downstream enterprises will mainly focus on picking up lead ingots in the short term, and their purchasing demand for lead ingots will pull back somewhat. Next week, close attention should be paid to downstream enterprises' cargo pick-up from social warehouses. Additionally, some primary lead smelters are about to complete maintenance, while secondary lead faces rising production pressure due to input tax invoice issues, leaving overall supply growth relatively inelastic. Lead price upward momentum is expected to weaken, but prices will continue to consolidate at highs, with the most-traded SHFE lead contract trading in a range of 16,000-16,450 yuan/mt.

Spot lead price forecast: 15,950-16,350 yuan/mt. On the consumption side, downstream enterprises' pre-holiday stockpiling has temporarily concluded, with subsequent activity mainly focused on cargo pick-up. On the supply side, primary and secondary lead enterprises are seeing both production increases and decreases, leaving supply constrained. Considering that primary lead smelters hold relatively low inventory, spot lead will continue to trade at high premiums. During this period, the lead ingot import window is widening, with more imported lead circulating in the market and greater price elasticity compared with domestic lead.