Refined Lead Supply Eases, Lead Prices Under Pressure at High Levels [SMM Lead Morning Comment Dec 9]

Last Friday night, LME lead opened at $2,091.5/mt. During the Asian session, it peaked at $2,102.5/mt before stabilizing. In the European session, bears increased their positions, causing LME lead to fluctuate downward, hitting a low of $2,065/mt, and finally closing at $2,066.5/mt, down $31.5/mt, a decline of 1.5%.

Last Friday night, the most-traded SHFE lead 2501 contract opened at 17,740 yuan/mt. It briefly touched a high of 17,800 yuan/mt at the beginning of the session, then consolidated around the daily moving average before weakening to a low of 17,630 yuan/mt. After a brief consolidation, it slightly rebounded and finally closed at 17,690 yuan/mt, down 60 yuan/mt, a decline of 0.34%.

Macro side, the US November non-farm payrolls data recorded the largest increase since March 2024, with the unemployment rate also rising, and the US dollar index adjusted at high levels.

Fundamentally, domestic lead ingot social inventory decreased, and supply-side disruptions pushed lead prices to continue fluctuating upward. Meanwhile, secondary lead profits improved, boosting the production enthusiasm of smelting enterprises. Although some smelters mentioned maintenance expectations in December, attention is still needed on the resumption of secondary lead enterprises and the release of new capacity. The overall production of secondary refined lead in December is expected to maintain an upward trend. Additionally, battery scrap prices may rise due to expectations for production increase in secondary lead enterprises, potentially reducing the continuous expansion of secondary lead profit margins. This week, as the SHFE lead 2412 contract approaches its delivery week, downstream purchasing enthusiasm slightly declined after lead prices strengthened, and spot transactions decreased. Attention should be paid to the risk of visible inventory accumulation due to lead ingot warehouse transfers for delivery.