SHFE Lead Opened Higher with a Gap and Held Up Well, LME Lead Consolidated at Lows Before Rebounding [SMM Lead Morning Brief]

SMM April 27 news:

Last Friday, LME lead opened at $1,950.5/mt. During the Asian session, LME lead moved sideways within the $1,948.5-1,955/mt range, dipping to a low of $1,948.5/mt. Entering the European session, driven by continued drawdowns in ex-China lead inventory, LME lead trended higher, reaching a high of $1,970/mt before pulling back slightly toward the close, ultimately settling at $1,960.5/mt, up 0.67%.

Last Friday evening, the most-traded SHFE lead 2606 contract opened higher with a gap at 16,715 yuan/mt, briefly dipping to 16,695 yuan/mt at the start of the session before rebounding to a high of 16,765 yuan/mt. The gains narrowed slightly toward the close, ultimately settling at 16,755 yuan/mt, up 85 yuan/mt or 0.51%. Open interest stood at 65,139 lots, down 4,365 lots from the previous trading day.

The lead-acid battery industry off-season continues, with downstream factories expanding the scope of production cuts and lead ingot procurement demand continuing to weaken, driving a gradual buildup in social inventory. Supply side, secondary lead enterprises in Anhui, Jiangsu and other regions saw further increases in production cuts, shutdowns, and maintenance, with regional spot supply continuing to contract. However, last week the operating rate at secondary lead smelters rebounded as scrap battery raw material inventory was replenished. Overall, bullish and bearish factors counterbalanced each other in the market. Combined with uncertainties in the macro environment, lead prices are expected to remain in the doldrums in the short term.