Seasonal Return of Automobile Consumption Improves Lead-Acid Battery Sales Orders [SMM Lead Morning Comment]

Overnight, LME lead opened at $2,079.5/mt. Due to the strengthening of the US dollar index, LME lead initially fell under pressure to $2,071.5/mt before rebounding. During the European session, it peaked at $2,110.5/mt and slightly dropped back at the end, closing at $2,085/mt, up 0.31%.

Overnight, the most-traded SHFE lead 2411 contract opened at 16,830 yuan/mt. It briefly touched a high of 16,890 yuan/mt at the beginning of the session. However, due to longs reducing positions, LME lead plunged to a low of 16,655 yuan/mt, finally closing at 16,700 yuan/mt, with no change in price.

Macro side, the UK's CPI annual rate for September recorded 1.7%, the lowest level since April 2021. The market expects the Bank of England to cut interest rates by 45 basis points by the end of the year, compared to 37 basis points before the data release. During his inspection in Fujian, Xi Jinping emphasized the need to fully focus on economic work in the fourth quarter and strive to achieve the annual economic and social development goals.

Fundamentally, the seasonal return of automobile consumption combined with policies such as "trade-in" has improved lead-acid battery sales orders, boosting the operating rate of battery producers. However, due to the rise in lead prices, downstream enterprises were cautious and only purchased lead ingots as needed, resulting in mediocre spot transactions. As some primary and secondary lead smelters resume operations after maintenance, the supply of lead ingots is gradually becoming more abundant, providing more options for downstream buyers. Overall, lead prices are expected to fluctuate upward in the short term.