SHFE/LME Price Ratio Expands, Focus on the Potential Opening of Refined Lead Import Window [SMM Lead Morning Comment Dec 16] 

Last Friday, LME lead opened at $2,005/mt and fluctuated downward during the Asian session; in the European session, LME lead rose initially but then declined, hitting a low of $1,994.5/mt. Bulls increased positions during the late session, pushing prices to a high of $2,016/mt, and LME lead finally settled at $2,013.5/mt, up 0.62%.

Last Friday evening, the most-traded SHFE lead 2501 contract opened lower at 17,355 yuan/mt and briefly touched a high of 17,370 yuan/mt during the early session. Due to the delivery of the SHFE lead 2412 contract and the accumulation of social inventories of lead ingots, longs reduced positions, driving SHFE lead to a low of 17,270 yuan/mt, and it eventually closed at 17,315 yuan/mt, down 0.69%.

Macro side, PBOC: By the end of November, the broad money (M2) balance stood at 311.96 trillion yuan, up 7.1% YoY. In the first 11 months of 2024, RMB loans increased by 17.1 trillion yuan, RMB deposits rose by 19.39 trillion yuan, and the cumulative increase in social financing scale was 29.4 trillion yuan, 4.24 trillion yuan less than the same period last year. CSRC: Firmly implement the important requirement of "stabilizing the real estate and stock markets" and effectively maintain the stability of the capital market. Wang Xin, Director of the Research Bureau of the PBOC: Will implement RRR cuts and interest rate cuts at an appropriate time and increase monetary and credit supply.

Fundamentals, the SHFE lead 2412 contract is delivered today, with suppliers transferring inventory to delivery warehouses, leading to an expected increase in social inventories of lead ingots. Meanwhile, secondary lead smelters are stocking up on scrap ahead of the year-end, and battery scrap prices are more likely to rise than fall. Cost factors may slow down the decline in lead prices. Additionally, the SHFE/LME price ratio has expanded, and attention should be paid to the potential opening of the refined lead import window.