Futures Market:
Last Friday, LME lead opened at $2,035/mt, fluctuated downward during the Asian session, weakened further to a low of $2,012/mt in the European session, and rebounded slightly before closing at $2,016/mt, down $23/mt or 1.13%.
Last Friday night, the most-traded SHFE lead 2504 contract opened at 17,400 yuan/mt, dipped to a low of 17,355 yuan/mt in early trading, and slightly rebounded to close at 17,405 yuan/mt, down 70 yuan/mt or 0.4%.
》Click to View SMM Lead Spot Historical Prices
Macro Side: The US threatened to impose tariffs on Canada again. Additionally, the Tariff Policy Commission of the State Council announced that the Canadian government will impose a 100% tariff on Chinese EVs starting October 1, 2024, and a 25% tariff on Chinese steel and aluminum products starting October 22, 2024. Fed Chairman Jerome Powell stated that the Fed does not need to rush to adjust interest rates. The Fed can afford to wait for clearer conditions. The uncertainty surrounding the impact of Trump administration policies remains high, and some recent inflation expectations surveys and market indicators have risen due to tariffs.
In the Shanghai market, Chihong lead was quoted at 17,465-17,530 yuan/mt, with premiums of 30-70 yuan/mt against the SHFE 2503 contract. Honglu lead was quoted at 17,480-17,500 yuan/mt, on par with the SHFE 2504 contract. In Jiangsu and Zhejiang regions, Tongguan and JCC lead were quoted at 17,440-17,500 yuan/mt, with discounts of 40-0 yuan/mt against the SHFE 2504 contract. The SHFE lead price center moved upward, and some suppliers awaited delivery while standing firm on quotes. Premiums were raised compared to the previous day. Additionally, ex-factory quotes for primary lead from smelters remained firm, generally quoted at premiums against the SMM 1# lead average price. Secondary refined lead suppliers actively followed the price increase, with discounts remaining unchanged. Mainstream ex-factory quotes for secondary refined lead were at discounts of 50-0 yuan/mt against the SMM 1# lead average price, while some cargoes in Jiangsu and Henan regions were quoted at premiums of 50 yuan/mt ex-factory. Last Friday, tax-free refined lead ex-factory quotes ranged from 16,100-16,250 yuan/mt. With rising lead prices, downstream battery producers maintained just-in-time procurement, and some smelters reported optimistic purchase willingness from downstream manufacturers within industrial parks, with moderate transactions.
Inventory: As of March 7, LME lead inventory decreased by 1,125 mt to 206,200 mt. As of March 6, the total social inventory of SMM lead ingots in five regions reached 64,800 mt, up 1,800 mt from February 27 but down 5,400 mt from March 3.
》Click to View SMM Metal Industry Chain Database
Lead Price Forecast Today:
Under the macro disturbances and the broad decline in non-ferrous metals, the bullish sentiment in lead futures has eased. Domestic prices will still require further policy guidance and the implementation of trade-in policies. Fundamentals side, on one hand, the resumption of production at primary and secondary lead enterprises and the commissioning of new secondary refined lead capacity have brought more refined lead supply. However, at the same time, raw material supplies such as scrap batteries and lead concentrates are also becoming increasingly tight. Lead prices are fluctuating at high levels, with weak downstream purchase enthusiasm. As the spot-futures price spread widens, suppliers are increasing warehouse transfers for delivery. This week marks the week before the delivery of the SHFE 2503 contract, and attention should be paid to the risk of visible inventory accumulation and lead price pullback pressure.
