1. Report Industry Investment Rating - Absolute price: Neutral - Option strategy: Sell wide straddle [3] 2. Core Viewpoints of the Report - The global lead concentrate market continues to be in a tight balance. Domestic TC remains low, and the negative processing fee range for imported ores is expanding. Mines are reluctant to sell, leading to passive production cuts at smelters. The domestic primary lead production rate is only 60%, and smelters in Hunan, Yunnan and other places are undergoing maintenance until January. Secondary lead production is limited due to the scarcity of waste battery supplies and limited profit recovery. Overall, the supply elasticity is insufficient. Although the demand is in the off - season for lead - acid batteries, the social inventory has continuously declined to a two - year low, and the spot premium is firm, providing support for prices. It is expected that the current lead price will maintain a volatile pattern. [3] 3. Summary by Relevant Catalogs Market News and Important Data Spot - On December 11, 2025, the LME lead spot premium was -$49.03/ton. The SMM1 lead ingot spot price changed by 100 yuan/ton to 17,075 yuan/ton compared with the previous trading day. The SMM Shanghai lead spot premium changed by 25 yuan/ton to 25.00 yuan/ton. The SMM Guangdong lead spot price changed by 100 yuan/ton to 17,125 yuan/ton. The SMM Henan lead spot price changed by 100 yuan/ton to 17,100 yuan/ton. The SMM Tianjin lead spot premium changed by 100 yuan/ton to 17,100 yuan/ton. The lead concentrate - scrap price difference remained unchanged at -25 yuan/ton. The price of scrap electric vehicle batteries changed by 25 yuan/ton to 9,925 yuan/ton. The price of scrap white shells remained unchanged at 10,075 yuan/ton. The price of scrap black shells changed by 25 yuan/ton to 10,275 yuan/ton. [1] Futures - On December 11, 2025, the main SHFE lead contract opened at 17,155 yuan/ton and closed at 17,155 yuan/ton, a change of 40 yuan/ton from the previous trading day. The trading volume for the whole trading day was 34,885 lots, a change of -1,564 lots from the previous trading day, and the position was 35,754 lots, a change of -3,561 lots from the previous trading day. The intraday price fluctuated, with a maximum of 17,220 yuan/ton and a minimum of 17,070 yuan/ton. In the night session, the main SHFE lead contract opened at 17,115 yuan/ton and closed at 17,120 yuan/ton, a 0.20% decrease from the afternoon close. According to SMM, the SMM1 lead price dropped by 125 yuan/ton from the previous trading day. In Henan, holders' quotes were at a discount of 90 - 50 yuan/ton to the SHFE lead 2601 contract, and the discount narrowed further. In Hunan, the quoted price of lead smelters for the delivery brand was at a premium of 0 - 25 yuan/ton to SMM1 lead. After some smelters sold out their inventory, the trading volume declined. As the lead price weakened, some downstream enterprises made purchases at low prices, but smelters generally delivered goods through long - term contracts, and the trading volume of spot contracts was relatively light. [2] Inventory - On December 11, 2025, the total SMM lead ingot inventory was 21,000 tons, unchanged from the previous week. As of December 11, the LME lead inventory was 235,475 tons, a decrease of 75 tons from the previous trading day. [2]

1. Report Industry Investment Rating - The investment rating for the lead industry is cautiously bullish [3] 2. Core Viewpoints of the Report - The global lead concentrate market remains in a tight balance, with domestic TC at a low level and the negative processing fee range for imported ores expanding. Mines are reluctant to sell, leading to a passive reduction in smelting output. The domestic primary lead production rate is only 60%, and smelters in Hunan and Yunnan are undergoing maintenance until January. Secondary lead production is limited due to a shortage of scrap battery supplies and limited profit recovery, resulting in insufficient overall supply elasticity [3] - Although it is the off - season for lead - acid batteries, social inventories have continuously declined to a two - year low, and the spot premium is firm, providing support for prices. Additionally, the impending interest rate cut by the Federal Reserve may be beneficial to the entire non - ferrous metal sector. Therefore, it is recommended to buy on dips for hedging between 17,300 yuan/ton and 17,350 yuan/ton this week [3] 3. Summary by Relevant Catalogs Market News and Important Data Spot Market - On December 8, 2025, the LME lead spot premium was -$49.15/ton. The SMM 1 lead ingot spot price increased by 25 yuan/ton to 17,200 yuan/ton. The SMM Shanghai lead spot premium increased by 25 yuan/ton to 20.00 yuan/ton. The SMM Guangdong lead spot price remained unchanged at 17,225 yuan/ton, the SMM Henan lead spot price remained unchanged at 17,200 yuan/ton, and the SMM Tianjin lead spot premium remained unchanged at 17,200 yuan/ton. The lead concentrate - scrap spread remained unchanged at - 50 yuan/ton. The price of scrap electric vehicle batteries increased by 25 yuan/ton to 9,900 yuan/ton, while the prices of scrap white shells and black shells remained unchanged at 10,075 yuan/ton and 10,250 yuan/ton respectively [1] Futures Market - On December 8, 2025, the main SHFE lead contract opened at 17,340 yuan/ton and closed at 17,340 yuan/ton, up 50 yuan/ton from the previous trading day. The trading volume was 38,061 lots, a decrease of 6,447 lots from the previous trading day, and the open interest was 43,107 lots, a decrease of 1,837 lots. The price fluctuated during the day, with a high of 17,380 yuan/ton and a low of 17,275 yuan/ton. In the night session, the main SHFE lead contract opened at 17,310 yuan/ton and closed at 17,320 yuan/ton, down 20 yuan/ton from the afternoon close [2] - According to SMM, the SMM 1 lead price increased by 25 yuan/ton from the previous trading day. In Henan, suppliers offered discounts of 120 - 50 yuan/ton to the SHFE lead 2601 contract for ex - factory sales, and some large - discount supplies were sold. In Hunan, smelters of deliverable lead brands offered premiums of 0 - 25 yuan/ton to the SMM 1 lead price for ex - factory sales, while non - deliverable brands sold at discounts of 80 - 30 yuan/ton to the SMM 1 lead average price [2] Inventory - On December 8, 2025, the total SMM lead ingot inventory was 21,000 tons, a decrease of 3,100 tons from the previous week. As of December 8, the LME lead inventory was 239,825 tons, a decrease of 3,725 tons from the previous trading day [2] Strategy - The strategy is to be cautiously bullish. Given the current market situation, it is recommended to buy on dips for hedging between 17,300 yuan/ton and 17,350 yuan/ton this week [3]