SMM October 21: since September 23, the main lead in Shanghai fell to 14055 yuan / ton, hitting the low point since June 2020, the main lead in Shanghai as a whole showed an upward trend, in the recent non-ferrous general rising atmosphere, the performance is relatively strong. In the early hours of this morning, Shanghai lead even broke through the resistance level of 16000 yuan / ton in intraday trading to 16330 yuan / ton, hitting a three-month high. The main increase in Shanghai lead narrowed slightly during the day, eventually closing at 15945 yuan / ton with a 1.5 per cent increase, or 13.4 per cent in just 15 trading days.
At the same time, Lun lead performed well, hitting a high of $2447 a tonne on October 20th, hitting its highest level since June 2018. LME lead stocks rose 275 tonnes to 57000 tonnes today. In terms of the spot price of lead ingots, according to the spot price of SMM metal, as of October 21, the average spot price of lead ingots of SMM alloy was 15825 yuan / ton, up 10.7% from the low of September 23.
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Fundamentals, last Friday Jiyuan District again power cuts, temporarily less impact on the refinery, SMM follow-up will continue to pay attention. With the lifting of the impact of environmental protection in October and the rapid repair of profits from the rebound in lead prices, the profit restoration production enthusiasm of recycled lead refineries has increased, which is expected to bring some supply increments. However, the impact of power cuts in the world is still continuing, Anhui, Henan and other places are still limiting the impact of electricity, so SMM believes that in the short term will continue to have an impact on regeneration, primary supply.
In terms of inventory, according to SMM data, domestic lead ingot stocks have been in a continuous accumulation stage since the end of April, continuously refreshing the all-time high since 2014. However, under the combined influence of loss, power restriction and environmental protection before the National Day, the overall supply reduction of primary lead, recycled lead and lead battery plate is greater than the consumption reduction, so the lead ingots can be removed to a small extent at the end of September. As of October 19, the total inventory of SMM lead ingots in the five regions totaled 193900 tons, down 11.4% from the high point of September 24 to 22100 tons.
Data source: SMM database
For the future lead ingot inventory trend, SMM expects that in the fourth quarter, global coal power and other energy problems continue, or continue to interfere with the lead industry chain upstream and downstream enterprises, coupled with the domestic primary lead into a centralized overhaul period, may lead to subsequent lead ingot accumulation pressure to slow down, the formation of certain support for lead prices, so SMM expects the fourth quarter lead price center of gravity will be higher than the third quarter.
Downstream consumer side, the current downstream is in the stage of replenishment on demand, many lead battery companies still have production plans in the fourth quarter, and it is expected that follow-up consumption will still be released.
In the short term, confidence in the resumption of recycled lead has been boosted, and the unreasonable rise in coal prices controlled by the state has briefly affected the pullback of black and non-ferrous prices, but the impact of short-term power cuts will still occupy a dominant position, and lead prices are expected to stop falling and rebounding. Maintain high operation.
However, in the medium and long term, the new expansion capacity of recycled lead is still in the process of being put into operation, especially high profits will stimulate the production enthusiasm of recycled lead enterprises. Therefore, attention should be paid to the pressure brought by the continuous release of recycled lead production capacity in the future.
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