Futures:
Overnight, LME lead opened at $1,892.5/mt. Affected by geopolitical risks outside China, risk-off sentiment in the market heated up, and LME lead quickly fell to $1,873/mt after opening. It then traded within the range of $1,870–1,880/mt from the Asian session through to the European session before dropping again towards the end of the night session. The intraday low hit $1,866.5/mt, the lowest level in nearly half a month. LME lead finally settled at $1,873/mt, down 1.32%.
Overnight, the most-traded SHFE lead 2608 contract opened at 15,920 yuan/mt. Heavy position rolling at the start of the session pushed SHFE lead to around 15,940 yuan/mt. However, as lead ingot inventory buildup weighed, SHFE lead continued to drift lower, posting an intraday low of 15,845 yuan/mt and finally settling at 15,860 yuan/mt, down 0.38%. Open interest stood at 65,368 lots, down 5,583 lots from the previous trading day. In addition, heavy positions were rolled from the SHFE lead 2608 contract to the 2609 contract, so the most-traded contract rollover warrants attention.
On the macro front:
Li Qiang, member of the Standing Committee of the Political Bureau of the CPC Central Committee and Premier of the State Council, stated the need to promote a smooth transition and shift between old and new growth drivers, accelerate the digital and intelligent transformation of manufacturing, and promote the large-scale commercial application of new technologies such as artificial intelligence. The 15th Five-Year Plan for Expanding Consumption deeply advances “AI + Consumption,” with total retail sales of social consumer goods expected to reach 60 trillion yuan by 2030.
US President Trump said a deal with Iran is still possible and that Middle East allies should pay for protection. Crude oil surged 10% intraday. The US military resumed its blockade on Iran, and Trump threatened a “heavy hit” tonight or tomorrow and a 20% fee on strait cargo shipments. US Fed Governor Waller stated that if core inflation remains persistently high, the Fed may need to raise interest rates, with the market pricing a 45% probability of a rate hike in July, up from 35% previously.
:
In the lead spot market yesterday, SHFE lead fell quickly after opening, and suppliers’ willingness to sell declined WoW, leading to fewer market quotations. Meanwhile, primary lead smelters maintained sales of EXW cargoes at discounts, with quotations from mainstream production areas against the SMM #1 lead average price at discounts of 50–0 yuan/mt. For secondary lead, smelters were less willing to sell due to widening losses, and some secondary refined lead was quoted against SMM #1 lead at discounts of 20–0 yuan/mt. Also, some imported refined lead appeared in the market, quoted at a discount of 300 yuan/mt against the SHFE lead 2608 contract, with no transactions concluded. Downstream enterprises had multiple procurement options and their just-in-time procurement was scattered with heavy bargaining, resulting in some transactions for discounted cargoes.
Inventory: As of July 13, LME lead inventory came in at 289,375 mt, unchanged from the previous trading day. Total SHFE lead ingot warrant inventory stood at 63,017 mt, down 1,070 mt from the previous trading day. SMM lead ingot social inventory across five regions totaled 72,200 mt, up 1,900 mt from July 6 and up 5,800 mt from July 9.
Lead price forecast today:
Recently, geopolitical risks in markets outside China have escalated again, fueling strong risk-aversion sentiment. In the Chinese market, as maintenance and production cuts at some primary lead smelters in north China gradually conclude, lead ingot supply is expected to recover somewhat. However, consumption in the lead-acid battery market remains sluggish, with limited procurement by downstream enterprises and a few intending to cut production again. Given the ample in-factory inventory at lead smelters, there is still a risk of lead ingot inventory buildup in the short term, dragging lead prices to consolidate on a subdued note.
Data Source Disclaimer: All data except publicly available information are processed by SMM based on public information, market communications, and our internal database models, and are for reference only. They do not constitute any decision-making advice.
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