LME Lead Fluctuated Downward and Closed Lower, SHFE Lead Bottomed Out and Rebounded While Remaining in the Doldrums [SMM Lead Morning Brief]

SMM News, March 27:

Overnight, LME lead opened at $1,906.5/mt. It edged up slightly in early trading and, after hitting a high of $1,908/mt, fluctuated downward, with the price center continuing to move lower to a low of $1,883.5/mt. It then rebounded quickly and fluctuated rangebound within the $1,889.5-1,897.5/mt range, finally closing at $1,890/mt. It posted a small bearish candlestick, down $21.5/mt, or 1.12%.

Overnight, the most-traded SHFE lead 2605 contract opened lower with a gap at 16,390 yuan/mt. In early trading, SHFE lead prices fell rapidly to a low of 16,365 yuan/mt, then fluctuated upward to a high of 16,450 yuan/mt. During the session, SHFE lead prices fluctuated rangebound within the 16,405-16,435 yuan/mt range, and finally closed at 16,415 yuan/mt. It posted a small bullish candlestick, down 45 yuan/mt, or 0.27%.

On the supply side, quotes from suppliers at primary lead smelters were relatively firm, and some were quoted at premiums due to reduced spot circulation. This week, inventory of delivery-brand primary lead fell by 6,800 mt WoW, which was expected to provide some support for primary lead prices. Most secondary lead smelters did not offer quotes, while some cargoes were quoted ex-works at a premium of around 50 yuan/mt against the SMM #1 lead average price. This week, the resumption pace at secondary lead smelters accelerated, with the operating rate rebounding 3.69% WoW, production increasing by 3,090 mt, and finished product inventories also accumulating on a weekly basis. On the demand side, downstream purchasing sentiment diverged, with both wait-and-see sentiment toward new-month long-term contracts and purchase as needed coexisting, and overall market transactions were average. SMM expected lead prices to maintain a fluctuating trend in the short term.