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Lead prices on the MCX rose by 0.52%, closing at ?184.4 as downstream lead-acid battery manufacturers restocked ahead of the National Day holiday. LME lead also experienced a price rebound, closing at $2,102.5/mt, marking a 1.06% increase amid declining inventories. SHFE lead followed a similar trend, reflecting an increase in open interest and lower warehouse inventories. Additional macroeconomic factors, including China's economic stimulus measures, supported the rise in lead prices. Analysts anticipate further price fluctuations as supply conditions are expected to ease after maintenance at lead smelters concludes in October.

Key Highlights

* MCX Lead closed up by 0.52% at ?184.4 amid pre-holiday restocking.

* LME Lead reached $2,102.5/mt, marking a 1.06% increase.

* SHFE lead prices saw a marginal rise, closing at 16,695 yuan/mt.

* Declining lead inventories and macroeconomic support from China boosted prices.

* Lead prices may fluctuate in October as supply increases post-maintenance.

Lead prices on the Multi Commodity Exchange (MCX) saw an increase of 0.52%, settling at ?184.4 per kg. This rise can be attributed to downstream restocking ahead of China’s National Day holiday, where lead-acid battery manufacturers ramped up their purchases to meet anticipated demand. Additionally, LME lead prices hit a monthly high, closing at $2,102.5/mt, representing a 1.06% increase. The boost came from declining lead inventories, despite the earlier pressure from a stronger U.S. dollar.

On the Shanghai Futures Exchange (SHFE), the most-traded lead contract saw a slight uptick, closing at 16,695 yuan/mt. Open interest increased by 919 lots, while warehouse warrant inventories continued to decrease, further supporting the upward trend. The market experienced a tug-of-war between long and short positions, which kept prices fluctuating throughout the session.

In terms of macroeconomic support, China’s recent stimulus measures, including a 30 basis points rate cut and a 300 billion yuan MLF operation, played a significant role in driving demand for lead. The country's continued focus on high-quality employment and economic development, as well as increased vehicle ownership and household appliance upgrades, indicated a strong demand trajectory for lead-based products.

Looking ahead, while lead prices remain firm, the conclusion of maintenance at lead smelters in October may result in increased supply. The market will also need to monitor the balance between scrap availability and ingot production, which could introduce volatility in the coming months.

Finally

MCX lead prices have shown strength due to pre-holiday restocking and declining inventories. However, potential fluctuations could occur as supply increases post-maintenance, adding uncertainty to the near-term outlook.

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