Pre-holiday downstream restocking may keep lead prices fluctuating upward [SMM Lead Morning Comment]

Overnight, LME lead opened at $2,082/mt. During the Asian session, the market was quiet, with LME lead consolidating between $2,085 and $2,090/mt. Entering the European session, a stronger dollar pressured down non-ferrous metals, causing LME lead to dip below $2,060/mt. However, with LME lead inventory continuing to decline, prices rebounded, maintaining a recent upward fluctuation, and finally closed at $2,102.5/mt, up 1.06%, marking a new high for the month.

Overnight, the most-traded SHFE lead 2411 contract opened at 16,555 yuan/mt. SHFE lead warehouse warrant inventory decreased, and SHFE lead opened low and trended high. The tug-of-war between longs and shorts intensified during the session, with SHFE lead mostly consolidating between 16,650 and 16,700 yuan/mt and finally closing at 16,695 yuan/mt, up 0.03%. The open interest reached 46,142 lots, an increase of 919 lots from the previous trading day.

Macro side, the State Council prioritized high-quality full employment as a key goal for economic and social development, promoting reasonable growth in labor compensation. The PBoC cut rates by 30 basis points and conducted a 300 billion yuan one-year MLF operation. The National Development and Reform Commission noted that China's major household appliance ownership exceeded 3 billion units, and vehicle ownership surpassed 300 million units, indicating significant potential for upgrades.

Fundamentally, before the National Day holiday, downstream lead-acid battery companies restocked lead ingots as needed, with SHFE lead warehouse warrant inventory decreasing daily this week, supporting a pre-holiday upward fluctuation in lead prices. Additionally, in October, maintenance at primary and secondary lead smelters is expected to conclude, combined with the release of new lead ingot capacity, leading to a high expected increase in lead ingot supply. We need to monitor the match between scrap and other raw material supplies and ingot output.