Futures:
Overnight, the LME lead 3M contract opened at $1,882.5/mt, shot up in Asian trading to a high of $1,894.0/mt, then consolidated lower to a low of $1,881.5/mt, and finally closed at $1,882.5/mt, down $3.0/mt or 0.16% from the previous trading day's closing price. Trading volume was 5,238 lots, open interest was 189,038 lots, down 5,194 lots, and the daily candlestick was a gravestone doji with a long upper shadow.
Overnight, the SHFE lead 2611 contract opened at 16,080 yuan/mt, quickly rose after the open to a high of 16,195 yuan/mt, then pulled back and consolidated in the 16,130-16,150 yuan/mt range, finally closing at 16,145 yuan/mt, up 40 yuan/mt or 0.25% from the previous trading day's close. Trading volume was 28,997 lots, open interest was 57,224 lots, and the contract posted a small bullish candlestick.
Overall, both SHFE and LME lead shot up to key resistance levels before pulling back. LME lead posted a gravestone doji, while SHFE lead posted a small bullish candlestick. Short-term rebound momentum weakened, and prices shifted into consolidation.
On the macro front:
Overseas, US Fed's Hammack said rate hikes may still be possible and favored "smaller, more frequent" moves. Today Waller will speak, followed by Barkin and Collins early tomorrow. With Middle East tensions continuing to escalate and the market awaiting this week's US inflation data, the US dollar index strengthened yesterday, closing up 0.35% at 102.58, holding at an 18-month high. US Treasuries were closed for Columbus Day. In the Middle East, the Saudi-Houthi conflict escalated over the weekend, and a supertanker was attacked in the Strait of Hormuz. Brent crude rose 1.53% to $104.31/bbl, and WTI rose 1.57% to $92.39/bbl.
In China, the 2026 Financial Street Forum Annual Conference will open on October 19. The Ministry of Finance lowered the VAT export rebate rate for new energy vehicles from 13% to 9%. September new energy vehicle retail sales were 1.084 million units, down 16.7% YoY.
Spot fundamentals:
Yesterday, SMM #1 lead prices rose 75 yuan/mt from the last trading day before the holiday. With SHFE lead consolidating on a strong note and contract rollover approaching, circulating supply in the Chinese market tightened. Suppliers held prices firm and spot premiums were pushed higher. Mainstream primary lead quotations were at premiums of 30-150 yuan/mt over the SMM #1 lead average price ex-works. Secondary refined lead shipments were limited, quoted at premiums of 0-75 yuan/mt over the SMM #1 lead average price ex-works. Downstream buyers mainly took delivery under long-term contracts, with spot orders purchased as needed. The spot market overall showed a "tight supply, high prices" pattern, with moderate trading activity.
Inventory: As of October 12, total SMM lead ingot social inventory across the five major regions reached 50,600 mt, up about 200 mt from October 8 and up 2,000 mt from September 30. LME lead inventory stood at 345,550 mt, down 1,575 mt from the previous trading day; total SHFE lead ingot warrant inventory was 42,056 mt, down 201 mt from the previous trading day.
Today's lead price forecast:
Overnight, SHFE lead edged up in the night session but retreated after a rapid rise, while LME lead posted a long upper-shadow gravestone doji. Both SHFE and LME were under pressure, with limited short-term rebound momentum. A strong US dollar and a hawkish US Fed also weighed on the nonferrous metals complex. With SHFE lead contract delivery and contract rollover approaching, spot circulating supply remained tight. Suppliers held prices firm, and premiums still provided support, but downstream purchases were mainly based on long-term contracts, with limited willingness to chase spot orders. Trading was thin amid high premiums. On the inventory side, social inventory across five regions saw a slight buildup, while LME and SHFE warrants continued to decline, offering neutral support to prices overall. In summary, spot lead prices today may stabilize slightly along with futures and consolidate with a narrow upward bias, remaining largely steady overall, with limited room to follow gains.
![SHFE and LME face resistance at highs, SHFE lead shot up then pulled back in night session, closing slightly up 0.25% [SMM Lead Morning Brief]](https://imgqn.smm.cn/usercenter/yqTpQ20251217171721.jpeg)
![Oversold recovery continues, SHFE lead 2611 contract consolidates and rebounds to close with a small bullish candlestick [Lead Futures Brief Comment]](https://imgqn.smm.cn/usercenter/PKFMX20251217171721.jpg)
