[SMM Analysis] has the fundamentals of Shanghai lead suddenly plummeted to cloudy?

SMM9 March 25 News: since September 23, Shanghai lead contract 2011 contract has fallen one after another, after a brief respite after September 11, this week suddenly dived, the lowest today reported 14695 yuan / ton. As of noon, it closed at 14835 yuan / ton, breaking through the 15000 yuan / ton mark below, and the intraday decline once widened to 2.38%.

From a macro point of view, the differences between the two parties on the scale of the economic stimulus bill in the United States are still huge, and the real landing of the stimulus package is a long way off, making investors worried about the progress of the US economic recovery, and agencies have halved their expectations for US economic growth in the fourth quarter. In addition, Europe has experienced repeated outbreaks, and stricter controls have also dragged down the pace of its economic recovery. In addition, the trade dispute between China and the United States continues, and there are many uncertainties in the market during the National Day holiday, and macro worries put pressure on the metal market.

From the perspective of lead fundamentals, there is also a lack of support.

On the supply side, in terms of primary lead, the production of domestic smelters is stable, the maintenance of smelters has been completed one after another, and production has resumed. In terms of recycled lead, the supply of waste batteries is still tight, the price remains high, and the cost support of recycled lead is the main factor supporting the price of lead. In addition, the mainstream transaction of recycled refined lead left the factory with an average price discount of 200,300 yuan / ton for SMM1# lead, and the follow-up attention was paid to the change of primary regeneration price difference.

On the consumer side, large lead-acid battery enterprises still maintain the rigid demand in the peak season, mainly for long order purchase, the transaction of bulk order is limited, and the downstream pre-festival reserve database has been basically completed. Overall, consumption is difficult to provide upward momentum for lead prices.

SMM believes that there is no bright spot in the current macro sentiment overlay fundamentals, and short-term lead price shocks are expected to weaken.