Futures market:
Overnight, LME lead opened at $2,077/mt, with its overall price center gradually moving upward, largely recovering the losses since the beginning of the week. It attempted to reclaim the $2,100/mt level but failed, reaching a high of $2,094/mt. LME lead eventually closed at $2,088.5/mt, up 0.31%.
Overnight, the most-traded SHFE lead 2505 contract opened at 17,625 yuan/mt. Domestic supply tightness and off-season consumption factors intertwined, leading to a stalemate between bulls and bears after the opening. SHFE lead mostly consolidated between 17,610-17,650 yuan/mt, with short-term supply imbalances relatively prominent. The overall price center of SHFE lead moved higher compared to the previous day. SHFE lead eventually closed at 17,640 yuan/mt, up 0.37%, with open interest increasing by 550 lots to 58,646 lots compared to the previous trading day.
》Click to view SMM lead spot historical quotes
Macro perspective: Two Fed voting members and Powell disagreed on the impact of tariffs on inflation, suggesting it may not be temporary, and focused on inflation expectations. One voting member mentioned that if inflation expectations spiral out of control, the Fed may need to prioritize price stability over employment goals. Trump announced a 25% tariff on non-US-made cars, causing auto stocks to decline further after hours.
In the lead spot market yesterday, SHFE lead fluctuated upward, with suppliers quoting prices accordingly. Due to limited circulating supply, there were small premium quotes. In the Jiangsu, Zhejiang, and Shanghai trading markets, primary lead quotations against the SHFE lead 2504 contract ranged from discounts of 20 yuan/mt to premiums of 20 yuan/mt. In ex-factory supplies from primary lead smelters, supply differences emerged between the north and south, with relatively looser supply in the southern region. Spot order quotations were at premiums of 50-200 yuan/mt ex-factory against the SMM 1# lead price. Secondary refined lead was sold at large discounts (discounts of 150-100 yuan/mt ex-factory against the SMM 1# lead average price), with downstream companies having multiple options and only making just-in-time procurement. Additionally, as the month-end approached, new long-term contracts for lead ingots began to be delivered. Downstream companies generally purchased as needed, with high lead prices leading to more market观望 and relatively weak成交.
Inventory: As of March 26, LME lead inventory increased by 25 mt to 23,200 mt, while SHFE lead warrant inventory stood at 60,177 mt, down 25 mt from the previous day.
》Click to view SMM metal industry chain database
Today's lead price forecast:
Recently, both supply and demand expectations in the lead market have shown a downward trend. On one hand, maintenance at primary lead smelters has led to a temporary reduction in supply, which has already impacted the current spot market circulation, continuing to support lead prices in an upward fluctuation. Meanwhile, secondary lead production has remained stable with some increases, with robust demand for raw materials such as scrap batteries, driving scrap prices higher and maintaining cost pressures. On the other hand, lead-acid batteries will enter the traditional off-season in April, coupled with high raw material costs for lead and antimony. Some companies are actively controlling inventory, with small and medium-sized enterprises showing signs of production cuts or holidays in the mid-to-late month, putting pressure on subsequent lead ingot destocking.
