Lead Ingot Social Inventory Destocking Continued to Slow Down, Obvious Resistance on Lead Prices [SMM Lead Morning Meeting Minutes]

Futures:

The London Metal Exchange was closed on May 25 for a UK bank holiday and resumed trading on May 26.

Overnight, the most-traded SHFE lead 2607 contract opened at 16,755 yuan/mt, briefly touched a high of 16,775 yuan/mt before pulling back, then moved sideways around the 16,700 yuan/mt level, and finally closed at 16,710 yuan/mt, down 0.27%.

On the macro front:

Guinea, the world's largest bauxite-producing country, will announce export control measures in June. China responded to the fact that no heavy rare earth had been exported to Japan for four months: China prohibits the export of dual-use items to Japanese military users and for military purposes in accordance with laws and regulations, aiming to stop Japan's "remilitarization" and nuclear ambitions. China responded to the prospect of a US-Iran deal: since the door to dialogue has been opened, it should not be closed again; the momentum of easing should be maintained, the general direction of political settlement should be upheld, and a solution that addresses the concerns of all parties should be reached through dialogue and consultation.

:

In the Jiangsu, Zhejiang, Shanghai market, a small volume of warrant-based cargoes were quoted. Suppliers mainly shipped cargoes self-picked up from primary lead smelter production sites. Due to supply differences between northern and southern markets, quotations in the northern market were firmer. On the secondary lead front, smelter losses were repaired and shipment enthusiasm increased, with secondary refined lead quoted at premiums of -50~0 yuan/mt ex-works against SMM #1 lead. As lead prices strengthened, downstream enterprises showed weakened purchasing enthusiasm. Some continued to purchase warrant-based cargoes from nearby warehouses, while those with rigid demand leaned toward lower-priced secondary lead cargoes. In terms of inventory: on May 25, LME lead was closed; LME lead inventory stood at 286,475 mt as of May 22. SMM lead ingot social inventory across five regions totaled 70,100 mt, down 3,200 mt from May 18 and down 3,200 mt from May 21.

Lead price forecast for today:

Recently, apart from individual social warehouses where lead ingot inventory declined due to downstream enterprises picking up goods, other social warehouses saw slight increases due to inventory transfers by suppliers and arrivals of imported lead. After concentrated dip-buying by downstream enterprises during the lead price pullback last week, lead prices rebounded in recent days, and downstream enterprises' purchasing enthusiasm weakened notably. In addition, as secondary lead smelter losses were repaired, smelters actively shipped at discounts. Secondary refined lead was quoted at premiums of -50~0 yuan/mt ex-works against SMM #1 lead price, while in contrast, primary lead was quoted at premiums of +0~+75 yuan/mt ex-works against SMM #1 lead price. Some downstream enterprises with rigid demand leaned toward secondary lead. Going forward, the destocking of lead ingot social inventory is expected to continue to slow down, and resistance above lead prices remains evident.

Data source disclaimer: Data other than public information is derived from public information, market communication, and SMM's internal database models, processed by SMM for reference only and does not constitute decision-making advice.