Futures:
Overnight, LME lead opened at a low of $1,869/mt and then rose along with a broad rally in nonferrous metals, reaching a high of $1,898/mt in the European session before finally closing at $1,890/mt, a gain of 1.23%.
Overnight, the most-traded SHFE lead 2609 contract opened higher with a gap at 15,520 yuan/mt, briefly touched a low of 15,490 yuan/mt after the open, drifted higher, and with bears reducing positions, rose to a high of 15,630 yuan/mt late in the session, finally closing at 15,605 yuan/mt, a gain of 1.04%.
Macro:
The US government solicited comments in the Federal Register on expanding the scope of metal tariff products, proposing tariffs on items such as welding machines and cranes. US Treasury Secretary Bessent: (On writing “buy yen” in a notepad) the aim was to ensure that reporters saw it. Bessent: It is possible to reach an agreement with Iran tomorrow (Wednesday, US Eastern Time) to open the Strait of Hormuz. China News Service reported that foreign media said the US plans to ban imports of Chinese optical modules. The central bank: It will conduct a 500-billion-yuan outright reverse repo operation on August 5, with a term of 3 months. The State Administration for Market Regulation held a meeting to advance a special campaign to thoroughly implement the fair competition review system. The central bank released data on liquidity provision through various tools in July 2026, with a net injection of 249.5 billion yuan via 7-day reverse repos and a net injection of 50 billion yuan through open market purchases of government bonds.
Spot Fundamentals:
SHFE lead rebounded after hitting a low, with suppliers selling along with the market and holding prices firm. Quotations from mainstream production areas were at premiums of 0-50 yuan/mt against the SMM #1 lead average price for ex-works delivery. In secondary lead, smelters were more frequently reducing or halting production, and some enterprises held prices firm to sell. Secondary refined lead quotations were at parity against the SMM #1 lead average price for ex-works delivery, with a few at a premium of 200 yuan/mt. Downstream enterprises were intending to buy the dip, with improving inquiry activity, among which EXW cargoes from smelters saw better transaction.
Inventory: On August 4, LME lead inventory decreased by 3,575 mt to 434,875 mt. As of August 3, total social inventory of SMM lead ingots in five regions reached 72,100 mt, up 3,700 mt from July 27 and up 3,600 mt from July 30.
Today's Lead Price Forecast:
Currently, risks from overseas geopolitical conflicts persist, with no expectations for lead consumption recovery in the Middle East. However, lead consumption in Southeast Asia is steady with a slight uptick, and spot premiums are widening, which will support the center of lead prices to shift upward to some extent. In the domestic spot market, downstream enterprise inquiry activity improved, and spot order trading volume increased. Combined with expectations for maintenance and production cuts at some smelters, bullish sentiment emerged, and lead prices briefly stopped falling.
![Lead Futures Both Close Higher Overnight, Boosted by Broad Gains in Nonferrous Metals [SMM Lead Morning Brief]](https://imgqn.smm.cn/usercenter/XMxKT20251217171720.jpeg)
