Macro bearish sentiment continues to ferment, putting pressure on non-ferrous metals collectively; lead prices weakened briefly [SMM Lead Morning Comment]

Last Friday night, LME lead opened at $1,963.5/mt, consolidated around the intraday moving average during the Asian session, rose to a high of $1,996.5/mt during the European session, then fluctuated downward, with bulls reducing positions and exiting the market, hitting a low of $1,951/mt and closing at this level, down $13/mt, a decline of 0.66%.

Last Friday night, the most-traded SHFE lead 2412 contract opened at 16,760 yuan/mt, briefly touched a high of 16,815 yuan/mt at the beginning of the session, then weakened to a low of 16,710 yuan/mt, and closed at 16,735 yuan/mt, down 50 yuan/mt, a decline of 0.3%.

Macro side, US inflation showed little further progress in declining and the US dollar continued to fluctuate at high levels, putting pressure on non-ferrous metals, which generally weakened. Although LME lead inventory continued to decline, the price rebound of LME lead still needs to wait for the release of macro bearish sentiment. Last Friday, two domestic departments issued an announcement on adjusting the export tax rebate policy, causing a brief disturbance in the non-ferrous metals market. The adjustment of battery export tax rebates mentioned in the announcement does not involve lead-acid batteries for the time being.

Fundamentals side, the pressure of inventory buildup amid delivery led to a rise in social inventory, coupled with the drag of LME lead, causing SHFE lead bulls to also reduce positions to avoid risks, putting pressure on domestic lead prices to fall back. Environmental protection disturbances combined with the year-end routine maintenance expectations make the supply of secondary refined lead unstable, and the subsequent focus should be on the resumption progress of secondary lead enterprises and the changes in the premiums and discounts of secondary refined lead. After the lead delivery ends, delivery brand sources re-entering the market may affect the premiums of primary lead. Additionally, downstream battery enterprises' operating rates are moderate, and after the risk of sharp lead price fluctuations is eliminated, the enthusiasm for downstream enterprises to buy the dip and replenish inventory for rigid demand will gradually recover. This week, attention should still be paid to the return of downstream consumption.