Tug-of-war between longs and shorts, short-term lead prices may continue to fluctuate [SMM Lead Morning Comment]

Last Friday night, LME lead opened at $2,074/mt. During the Asian session, it briefly touched $2,074/mt before declining. In the European session, it continued to fluctuate downward, hitting a low of $2,014/mt, down $30/mt or 1.45%, recording a large bearish candlestick.

Last Friday night, the most-traded SHFE lead 2412 contract opened at 16,770 yuan/mt. It initially fluctuated upward, reaching a high of 16,835 yuan/mt before consolidating and then falling under pressure, finally closing at 16,765 yuan/mt, down 30 yuan/mt or 0.18%.

Macro side, the US dollar index strengthened, and market investors awaited the employment data to be released this week. On Saturday, China's Vice Minister of Finance Liao Min stated that China's economic stimulus plan aims to boost consumption. Besides monetary policy, China will also increase counter-cyclical adjustments in fiscal policy and is confident in achieving the annual economic growth target of around 5%.

Fundamentals side, contradictions are not yet prominent, and downstream enterprises maintain restock as needed. The long-term contracts for lead ingots for November have started to be delivered, and downstream enterprises may reduce spot order purchases. Social inventory of lead ingots first decreased and then increased, with the risk of inventory buildup still existing in the future. Additionally, battery scrap prices are more likely to rise than fall. In some regions, secondary refined lead is sold ex-factory at a premium of 0-50 yuan/mt over the SMM 1# lead average price, with sellers reluctant to sell. Domestic lead prices have strong support at the bottom, and short-term prices may continue to fluctuate.