The transfer of delivery brand lead ingots to warehouses is underway, and the increase in social inventory is expected to cause lead prices to fluctuate rangebound [SMM Lead Morning Comment]

Overnight, LME lead opened at $2,035.5/mt, fluctuated rangebound during the Asian session, and slightly rose to $2,048.5/mt during the European session. It then fell to $2,022.5/mt due to long liquidation at the end of the session, finally closing at $2,028.5/mt, down 0.42%, marking the second consecutive decline.

Overnight, the most-traded SHFE lead 2412 contract opened at 16,755 yuan/mt, briefly touched a high of 16,775 yuan/mt at the beginning of the session before plunging to 16,620 yuan/mt, and finally closed at 16,670 yuan/mt, down 0.71%.

Macro side, the 12th meeting of the Standing Committee of the 14th National People's Congress held its second plenary session: the meeting heard reports on financial work by Pan Gongsheng, Governor of the People's Bank of China, entrusted by the State Council, and a comprehensive report on the management of state-owned assets in 2023 by the State Council. The latest data on state-owned assets showed that state-owned enterprise assets totaled 371.9 trillion yuan, financial assets totaled 445.1 trillion yuan, and the total land area was 523.71 million hectares.

Fundamentals, SHFE lead fluctuated rangebound, and the spread between futures and spot prices still has room. The willingness of holders to deliver to warehouses is moderate, and the transfer of delivery brand lead ingots to warehouses is underway, with a slight increase in social inventory of lead ingots. Going forward, we need to pay attention to both the transfer of lead ingots for delivery and the resumption progress of lead smelters after the lifting of smog warnings. In the short term, lead prices are expected to remain fluctuating rangebound.