Futures:
Overnight, the LME lead 3M contract opened at $1,903.5/mt. During the Asian session, funds steadily pushed up futures, with prices drifting higher continuously and reaching an intraday high of $1,914/mt. In the European session, bullish momentum faded quickly, and futures came under pressure, drifting lower in a continuous decline and hitting bottom at a low of $1,890/mt. Near the close, losses narrowed slightly, and it finally settled at $1,892.5/mt, down $9/mt, or 0.47%.
Overnight, the most-traded SHFE lead 2608 contract opened at 16,180 yuan/mt, briefly dipped to a low of 16,125 yuan/mt in early trading, then bulls quickly fought back, pushing prices to drift higher to 16,200 yuan/mt. After the spike, upward momentum faded quickly, and futures remained under pressure below the intraday moving average, drifting lower to finally settle at 16,130 yuan/mt, down 60 yuan/mt, or 0.37%.
Macro front:
The US Supreme Court blocked Trump’s dismissal of Fed Governor Cook. Trump: Will immediately take action on Fed Governor Cook’s eligibility to serve. Iran: The current focus is on implementing the memorandum of understanding, and no talks with the US will be held in the near term. China and the EU officially confirmed the establishment of a China-EU trade and investment consultation mechanism. Chinese air conditioners sold out in Europe, with Midea doubling sales and Gree fully sold out. Starting July 1, nearly 20 semiconductor companies initiated a new round of price hikes with concentrated adjustments.
Spot fundamentals:
SHFE lead remained in the doldrums, and suppliers sold at prevailing rates. Price premiums in Jiangsu, Zhejiang, and Shanghai were basically flat WoW. EXW cargoes from primary lead smelters were quoted lower in the south and higher in the north, with mainstream producing area quotations ranging from a discount of 50 yuan/mt to a premium of 50 yuan/mt against the SMM #1 lead average price. For secondary lead, smelters held back from selling at low prices and were less willing to quote; some secondary refined lead was quoted at premiums of 0-50 yuan/mt against SMM #1 lead on an EXW basis, remaining in an inverted state versus primary lead. For downstream enterprises, demand was limited at month-end. Most enterprises only made just-in-time procurement or used long-term contracts, with limited inquiries and thin transactions in the spot market.
Inventory: On June 29, LME lead inventory decreased by 450 mt to 297,000 mt; SMM lead ingot social inventory in five regions rose by 3,700 mt to 71,200 mt.
Today's lead price forecast:
Recently, the secondary lead supply side has seen a tug-of-war between longs and shorts: on one hand, several previously maintenance-hit secondary lead smelters have delayed their production resumptions; on the other hand, some smelters have gradually resumed production, with supply increases and decreases offsetting each other. The demand side is visibly under pressure, with a slow downstream consumption recovery pace and low willingness among enterprises to purchase and pick up goods. Combined with the dual impact of the traditional off-season and high temperatures, many downstream processing enterprises plan to halt production for holidays, further dragging down end-use demand. Currently, lead prices remain on a downward trajectory, but primary and secondary lead prices have inverted, coupled with scrap battery raw material costs staying high, providing bottom support for lead prices.
![Supply Divergence and Weakening Demand: Raw Material Costs Support Lead Prices [SMM Lead Morning Brief]](https://imgqn.smm.cn/usercenter/EhsCj20251217171721.jpeg)
