Futures:
On Friday, LME lead opened at $1,975/mt. During the Asian trading session, it fluctuated around the daily moving average. In the European trading session, it fluctuated upward, reaching a high of $1,998/mt before rebounding and touching $1,996.5/mt, then adjusted and finally closed at $1,992/mt, up $22/mt, with a 1.12% increase.
On Friday night, the most-traded SHFE lead contract opened at 16,790 yuan/mt. It initially dipped to 16,755 yuan/mt, then fluctuated upward, reaching a high of 16,895 yuan/mt, adjusted, and finally closed at 16,830 yuan/mt, up 70 yuan/mt, with a 0.42% increase.
On the macro front, on August 24 (local time), US Vice President Vance stated that new sanctions against Russia to pressure it to end the conflict in Ukraine are not out of the question, and the US has multiple options to exert pressure on Russia. After Powell's dovish remarks, traders increased their bets on a US Fed interest rate cut. Domestically, the central bank continued to inject liquidity, announcing that it would conduct a 600 billion yuan MLF operation on August 25.
Spot market fundamentals:
In the Shanghai market, Chihong and Honglu lead were quoted at premiums of -50~0 yuan/mt against the SHFE 2509 contract; in the Jiangsu and Zhejiang markets, Jijin and JCC lead were quoted at premiums of -30~-20 yuan/mt against the SHFE 2509 contract. SHFE lead was in a consolidation phase, with suppliers selling along with the market, still offering small discounts. Meanwhile, primary lead smelters maintained quotations at discounts of 50 yuan/mt to premiums of 80 yuan/mt against the SMM #1 lead average price. For secondary refined lead, smelters mostly held firm on prices, with quotations ranging from discounts of 25 yuan/mt to premiums of 25 yuan/mt against the SMM #1 lead average price. Downstream enterprises showed moderate procurement enthusiasm at month-end, with some waiting for the start of new long-term contracts, focusing on digesting inventories in the short term, leading to sluggish spot market transactions.
Inventory: As of August 21, LME lead inventory decreased by 6,550 mt to 273,050 mt; SMM five-region social inventory of lead ingots totaled 69,900 mt, down 1,900 mt from August 14 and 1,100 mt from August 18.
Today's lead price forecast:
In late August, the spot market had relatively loose supply, with primary lead maintaining discount quotations. Secondary lead prices inverted compared to primary lead, and downstream enterprises preferred purchasing primary lead. In September, more maintenance plans were scheduled for primary lead smelters, and additional maintenance plans were also announced for secondary lead smelters, indicating an expected tightening of lead ingot supply. The tight supply of lead concentrates in late August did not ease, and some primary lead smelters lowered lead concentrate TCs again to ensure raw material supply and stable production. Subsequent attention should still be paid to whether the SCO summit and parade activities have any impact on the production and transportation of enterprises along the lead industry chain.
