Futures:
Overnight, LME lead opened at $1,963/mt. Amid expectations of the lifting of the Middle East shipping ban, crude oil prices weakened, while the US dollar index strengthened on expectations of interest rate hikes. Base metals generally turned negative, and LME lead fluctuated downward throughout the day, hitting an intraday low of $1,932/mt, the lowest in more than two months. By the close, LME lead finally settled at $1,944.5/mt, down 1.04%.
Overnight, the most-traded SHFE lead 2608 contract opened at 16,415 yuan/mt. Weighed down by the decline in LME lead, SHFE lead weakened and fell at the open. However, supply-side maintenance factors in China persisted, and longs and shorts remained deadlocked. SHFE lead mostly traded between 16,345-16,385 yuan/mt, finally settling at 16,380 yuan/mt, up 0.06%. Its open interest stood at 80,124 lots, up 694 lots from the previous trading day.
On the macro front:
Key events: US-Iran negotiations were "talking past each other": Trump said Iran made concessions on verification, while Iran said $12 billion in funds would be unfrozen. Oman coordinated with the International Maritime Organization to open a temporary shipping lane in the Strait of Hormuz. Additionally, the US 60-day sanctions waiver took effect, and Iran began courting Asia's largest oil buyers; reports said 68 million barrels of crude oil were pending sale. Macro data: US June flash PMIs beat expectations across the board, with manufacturing PMI hitting a more than four-year high but the employment gauge falling to a six-year low. The UK economy contracted again: June PMI fell to a 14-month low, putting Labour's growth promises under pressure.
:
Yesterday in the lead spot market, SHFE lead maintained a consolidation trend. Suppliers sold according to market conditions, and quotation premiums and discounts in Jiangsu, Zhejiang, and Shanghai remained basically unchanged. However, EXW quotations for primary lead cargoes from smelters changed, mainly with discounts in the southern regions widening. Mainstream production area quotations against the SMM #1 lead average price were at discounts of 50 yuan/mt to premiums of 60 yuan/mt EXW. In secondary lead, smelters held back from selling at low prices, so quotations were scarce. Some spot orders of secondary refined lead were quoted around parity to the SMM #1 lead average price EXW. Downstream enterprises only made just-in-time procurement. Among them, a few large enterprises planned to suspend procurement, while some enterprises intended to buy on dips, but there was considerable bargaining, and some low-priced cargoes were traded.
Inventory: As of June 23, LME lead inventory stood at 300,650 mt, down 1,200 mt from the previous trading day. Total SHFE lead warrant inventory was 62,706 mt, down 49 mt from the previous trading day.
Today's lead price forecast:
Recently, US-Iran peace talks have made new progress, and the Middle East shipping ban is about to be lifted. The nonferrous metals supply chain will resume, and under expectations of the recovery of shipping and energy supplies, nonferrous metals have generally weakened. In China’s lead market, smelter maintenance and recovery coexist, making it difficult to quickly fill the short-term supply gap for lead concentrates and scrap in the near term. Coupled with the current off-season in consumption offset by expectations of policy dividends in H2, bullish and bearish factors are intertwined in the market. Lead prices are expected to continue consolidating, while caution is warranted regarding the risk of the lead ingot import window opening further amid a scenario where the overseas market underperforms the domestic market.
Data Sourcing 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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