SHFE and LME Under Pressure Pulling Back, SHFE Lead and LME Lead Both Closed Lower [SMM Lead Morning Meeting Minutes]

Futures:

Last Friday evening, the most-traded SHFE lead 2026 contract opened lower with a gap at 16,570 yuan/mt. At the beginning of the session, SHFE lead prices fluctuated downward, hitting a low of 16,405 yuan/mt. From mid-session to the close, prices rebounded slightly, ultimately closing at 16,440 yuan/mt, recording a small bearish candlestick, down 70 yuan/mt or 0.42%.

Last Friday, LME lead opened at $2,013.5/mt, briefly edging up to $2,014/mt before entering a downward fluctuation, hitting a low of $1,973/mt. Near the close, market sentiment recovered somewhat, and LME lead prices edged up, ultimately closing at $1,984/mt, down $28/mt or 1.39%.

On the macro front:

Israeli media: Netanyahu spoke with Trump, discussing the possibility of resuming military operations against Iran. Trump issued a military threat to Iran and was set to discuss military action options on Tuesday. US media: Iran plans to charge transit fees for submarine fiber-optic cables through the Strait of Hormuz. UK media: UK Prime Minister Starmer intended to resign from his position. ChangXin Technology: H1 revenue is expected to reach 110-120 billion yuan, with net profit attributable to the parent company of 50-57 billion yuan. China successfully launched the 9th batch of networking satellites for the Qianfan constellation. Wuxi will establish a large-scale "Token factory." The Shenzhou-23 mission plans to launch in the coming days.

Spot fundamentals:

Last Friday, SHFE lead reversed and pulled back. In the Jiangsu, Zhejiang, Shanghai region, spot discounts narrowed slightly, with some suppliers quoted at premiums of +20~+30 yuan/mt, while cargoes self-picked up from primary lead smelter production sites saw relatively reduced circulation. Some suppliers suspended shipments. Meanwhile, secondary lead smelters in east China successively resumed production, and secondary lead circulation relatively increased. Smelters' sentiment to hold prices firm eased, with secondary refined lead quoted at parity with SMM #1 lead on an ex-factory basis. However, downstream enterprises had limited rigid demand. In particular, as lead prices pulled back, risk-averse sentiment in the market was strong, and spot market transactions remained sluggish.

Inventory: On May 15, LME lead inventory decreased by 250 mt to 265,000 mt. On May 14, SMM five-region lead ingot social inventory increased by approximately 6,100 mt WoW.

Lead price forecast for today:

Last week, primary lead production edged up slightly, while secondary lead smelters saw both short-term production cuts/shutdowns and production resumptions coexisting. Import lead side, the import window was closed, and the inflow of imported lead into China decreased. The supply side overall presented an intertwined pattern of bullish and bearish factors. The battery consumption off-season continued in May, with weak end-use demand providing limited support for lead prices. Lead prices are expected to remain in the doldrums in the short term.