Futures:
Overnight, LME lead opened at $1,976.5/mt, fluctuated downward during the Asian session to touch a low of $1,973.5/mt, entered the European session, rebounded to touch a high of $1,988/mt, and finally closed at $1,983.5/mt, up $10/mt, or 0.51%.
Overnight, the most-traded SHFE lead contract opened at 16,990 yuan/mt, hovered around the daily moving average after the opening, touched a high of 17,010 yuan/mt, then experienced a slight correction, thereafter fluctuated rangebound under pressure from the daily moving average, edged up slightly before the close, and finally settled at 16,985 yuan/mt, up 80 yuan/mt, or 0.47%.
On the macro front, on November 26 local time, the US Trade Representative's Office announced an extension of tariff exemptions, established under the Section 301 investigation concerning technology transfer and intellectual property issues with China, until November 10, 2026. The existing exemptions were originally set to expire on November 29 this year. The National Development and Reform Commission (NDRC) held a meeting with relevant departments and industry associations to study and formulate standards for identifying costs related to disorderly price competition, among other tasks. Domestically, from January to October, profits of industrial enterprises above the designated size nationwide increased by 1.9% YoY. As of 10 p.m. on the 27th, the fire at Hong Fu Yuen in Tai Po, Hong Kong, had resulted in 75 fatalities, including one firefighter.
Spot fundamentals:
In the Shanghai market, Chihong lead was quoted at premiums of 10-50 yuan/mt against the SHFE lead 2512 contract. The price center of SHFE lead moved further downward. Suppliers held prices firm for shipments, with more offers quoted at premiums. Meanwhile, offers for primary lead cargoes self-picked up from production sites were firmer, quoted at premiums of 0-100 yuan/mt against the SMM #1 lead average price ex-works. Secondary lead enterprises were reluctant to sell at low prices, with some suspending secondary refined lead shipments or quoting at premiums of 50-80 yuan/mt against the SMM #1 lead price ex-works. Downstream enterprises purchased as needed, mainly focusing on low-priced cargoes, making it difficult to conclude deals for high-premium offers. Both upstream and downstream enterprises exhibited a strong wait-and-see sentiment, resulting in sluggish transactions.
Inventory: On November 27, LME inventory decreased by 800 mt to 264,175 mt. According to SMM, as of November 27, the total social inventory of lead ingots across five regions stood at 35,000 mt, down 2,700 mt from November 20 and down 2,000 mt from November 24.
Today's lead price forecast:
Recently, the impact of certificate renewal-related production reductions and halts at secondary lead enterprises in regions such as Anhui and Jiangsu persists. Maintenance at secondary lead enterprises in north China has not yet concluded. Coupled with the decline in lead prices and lower profits for smelters, some enterprises have suspended shipments of secondary refined lead. Some suppliers are reluctant to sell, quoting at premiums of 0-80 yuan/mt against the SMM #1 lead average price ex-works. Downstream enterprises continue to favor purchasing primary lead. In addition, primary lead enterprises are also undergoing maintenance, leading to regionally tight supply of lead ingots, with downstream enterprises making just-in-time procurement distributed to social warehouses near consumption areas. Entering December, maintenance at primary lead smelters has increased. If lead prices continue to weaken, the production enthusiasm of secondary lead enterprises may experience a decline beyond expectations. The regionally tight supply of lead ingots and the expectation that social inventory will remain at low levels provide strong support for lead prices.
