Short-term Lead Trading Anchor: Supply and Consumption Stalemate, Lead Prices May Continue to Consolidate [SMM Lead Morning Comment]

Overnight, LME lead opened at $2,080/mt. The US dollar index continued to rise, suppressing non-ferrous metals. LME lead moved downwards after a higher opening, especially during the European session, quickly falling to around $2,055/mt and finally closing at $2,055/mt, up 1.11%.

Overnight, SHFE lead warehouse warrant inventory continued its slight decline. The most-traded SHFE lead 2411 contract opened at 16,690 yuan/mt. After the opening, SHFE lead fluctuated upward, reaching around 16,800 yuan/mt. However, the momentum of the bulls was insufficient, and in the latter part of the trading session, SHFE lead gave back its gains, finally closing at 16,745 yuan/mt, down 0.15%. Its open interest was 26,376 lots, a decrease of 2,507 lots from the previous trading day.

Macro side, the Chinese President attended the 16th BRICS Summit and delivered an important speech. The Ministry of Industry and Information Technology (MIIT) made the latest statements on automobile consumption, artificial intelligence, low-altitude economy, and commercial spaceflight. It mentioned that the automotive industry still faces challenges such as insufficient domestic effective demand and increasing uncertainties and instabilities in overseas exports. The next step will be to take multiple measures to expand automobile consumption and optimize automobile production access management policies.

Fundamentals side, in October, lead ingot showed a dual increase in supply and demand, with fundamental news being mediocre, and lead prices remained in a consolidation phase. On one hand, the issue of tight raw material supply still exists, such as strong cost support from battery scrap. At the same time, lead concentrates need to be stockpiled for winter, and unexpected shutdowns of lead-zinc mines domestically and abroad have occurred, making it difficult for smelters to negotiate TCs. On the other hand, lead consumption seasonally improved, but the consumption recovery was limited, making it difficult for lead ingots to be destocked in large quantities in the short term.