Futures:
Overnight, LME lead opened at $1,870.5/mt, consolidating during the Asian session. Entering the European session, LME lead attempted to reclaim $1,880/mt but failed. Subsequently, LME lead inventory data showed a single-day increase of 80,000 mt, bears entered en masse, and LME lead plunged vertically at one point, hitting an intraday low of $1,851/mt, a new low since April 9, 2025. Towards the close, LME lead's losses narrowed somewhat, eventually settling at $1,866.5/mt, down 0.35%.
Overnight, the most-traded SHFE lead 2608 contract opened at 15,870 yuan/mt. Dragged down by the decline in LME lead, SHFE lead fell quickly after opening, hitting an intraday low of 15,595 yuan/mt, a new low since December 13, 2023. In subsequent trading, the tug-of-war between longs and shorts intensified, and the decline in SHFE lead slowed, eventually settling at 15,640 yuan/mt, down 1.45%. Open interest stood at 66,269 lots, up 2,116 lots from the previous trading day. Additionally, open interest in the SHFE lead 2609 contract had increased to 95,000 lots, warranting attention to the contract rollover of the most-traded contract.
On the macro front:
In his debut congressional testimony, Fed Chairman Warsh said the Fed has “zero tolerance” for persistently high inflation and will act on data even if criticized by Trump, adding that the cooling in June CPI does not mean the inflation mission is “accomplished.” The “New Fed Wire” commented: Warsh stressed zero tolerance on high inflation but gave no hint on the rate path. Meanwhile, US President Trump reversed course just one day after his initial statement: he abandoned the 20% fee on shipments through the Strait of Hormuz, replacing it with trade and investment deals between Gulf states and the US, causing US oil futures to “plunge” intraday. Trump also announced an imminent “major” oil agreement with Iraq, while Iraq's Prime Minister said US troops must withdraw by the end of September.
:
Yesterday, in the lead spot market, SHFE lead continued to consolidate on a subdued note. Suppliers' selling sentiment diverged. In Jiangsu, Zhejiang, Shanghai, warrant cargo quotes saw unchanged premiums/discounts, while quotes for EXW cargoes from primary lead smelters showed widening discounts, with mainstream producing areas quoting at discounts of 50-0 yuan/mt against the SMM #1 lead average price. On the secondary lead front, smelters faced prominent losses, dampening selling willingness. Some secondary refined lead quotes were near parity with the SMM #1 lead average price. Moreover, an increased flow of imported lead was available in the market, quoted at discounts of 350-300 yuan/mt against the SHFE lead 2608 contract, or at parity with the SMM #1 lead average price on an EXW port basis. Downstream enterprises displayed strong wait-and-see sentiment with limited inquiries; some opted to hold out for lower prices. Spot order market transactions were sluggish.
Inventory: As of July 14, LME lead inventory stood at 370,075 mt, up 80,700 mt from the previous trading day. Total SHFE lead ingot warrant inventory was 62,967 mt, down 50 mt from the prior trading day.
Lead Price Forecast for Today:
Bearish factors in markets outside China continue to ferment, geopolitical risks persist, and LME lead inventory has surged to a near 14-year high, significantly pressuring lead prices. Against the backdrop of overseas lead ingot inventory buildup, the inventory disparity between domestic and overseas markets further heightens expectations for lead ingot imports. Market pessimism continues to intensify, and lead prices weaken accordingly. Additionally, it is crucial to note that the supply gaps for lead concentrates and scrap batteries remain substantial, with their prices more likely to rise than fall. In particular, losses for secondary lead enterprises have deepened further, and close attention must be paid to the impact of production changes at secondary lead enterprises on lead price trends going forward.
Data Source Statement: Except for publicly available information, all other data are processed by SMM based on public information, market communication, and SMM's internal database models. They are for reference only and do not constitute any decision-making advice.
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