The secondary-primary lead price inversion provides support, yet month-end demand drags lead prices into the doldrums [Lead Futures Brief Comment]

SMM, June 26 –

During the day, the SHFE lead 2608 contract opened at 16,260 yuan/mt. In the morning session, the futures held near the moving average and moved sideways, with the trading pace steady. In the afternoon, funds gradually entered the market, pushing prices to drift higher. Prices hit an intraday high of 16,310 yuan/mt, then pulled back slightly towards the close, finally closing at 16,280 yuan/mt, up 75 yuan/mt on the day, a gain of 0.46%, forming a small bullish candlestick. Open interest declined overall during the day, and trading volume was concentrated during the afternoon rally. Recently, lead prices have been falling continuously, with secondary lead smelters facing deepening losses, leading to reduced willingness to sell and tighter supply in the market. Primary lead producers were actively selling, widening their discounts to facilitate transactions, resulting in a price inversion of up to 100 yuan/mt between secondary and primary lead, which provided a floor for lead prices intermittently. However, at present, with the half-year mark coinciding with month-end settlements, large downstream battery enterprises are focusing on inventory checks and closing accounts, with raw material purchases mostly postponed to July. Weak demand is likely to persist until end-June, keeping lead prices in the doldrums in the short term.

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