Futures:
Overnight, LME lead opened at $1,893/mt, drifted higher in Asian trading to touch a high of $1,907.5/mt before weakening, and entering European trading, LME lead gave back most of its gains, dipping to a low of $1,883.5/mt, and finally closing at $1,890/mt, unchanged with a 0% change.
Overnight, the most-traded SHFE lead 2609 contract opened at 15,735 yuan/mt, early in the session touched a session high of 15,745 yuan/mt before drifting lower, bulls reduced positions on SHFE lead, dipping to a low of 15,600 yuan/mt in late trading, and finally closing at 15,640 yuan/mt, down 0.73%.
Macro Front:
US July ADP employment came in at 44,000, below market expectations of a 70,000 increase and the downwardly revised 95,000 in June, marking the smallest gain since January this year. The US Treasury Department will maintain its buyback program at the same pace as the previous quarter and keep auction sizes unchanged at least for the coming few quarters.
China's Ministry of Commerce: Countermeasures taken against US compliance testing companies. China's designated certification body for CCC certification suspended entrusting US certification organizations to conduct factory follow-up inspections. The "15th Five-Year Plan for Promoting the Development of Small and Medium-Sized Enterprises," jointly formulated by MIIT and multiple departments, is about to be released. The Ministry of Foreign Affairs responded to the US plan to ban Chinese optical modules: China firmly opposes the US generalization of the national security concept and will continue to firmly safeguard the legitimate rights and interests of Chinese enterprises.
Spot Fundamentals:
In Shanghai, Chihong lead was quoted at 15,730-15,830 yuan/mt, representing premiums of 50-100 yuan/mt against the most-traded SHFE lead 2609 contract. SHFE lead rose sharply, suppliers sold cargoes as the market moved, and premium quotes in Jiangsu, Zhejiang, Shanghai remained unchanged. However, quotes for EXW cargoes from primary lead smelters diverged; smelters held prices firm while selling, while traders widened discounts on sales, with mainstream producing regions quoting premiums of 0-50 yuan/mt against SMM #1 lead average price. In secondary lead, as lead prices rebounded, secondary lead smelters showed slightly improved willingness to sell, secondary refined lead quotes were at discounts of 25-0 yuan/mt against SMM #1 lead average price, with a few at a premium of 75 yuan/mt. Downstream enterprises exhibited strong wait-and-see sentiment, inquiries significantly decreased from yesterday, some suppliers indicated almost no inquiries, and spot market trading volume plummeted.
Inventory: On August 5, LME lead inventory decreased by 3,325 mt to 431,550 mt; as of August 3, SMM lead ingot social inventory across five locations totaled 72,100 mt, up 3,700 mt from July 27 and 3,600 mt from July 30.
Lead Price Forecast Today:
Supply side, primary lead saw additional maintenance in August, with production expected to decline; while secondary lead production also has expectations of decline, attention should be paid to the boost from the rebound in lead prices on smelter production enthusiasm, with some enterprises having the probability of early production resumptions. In addition, currently lead ingot social inventory stays high, be cautious of the pullback risk for lead prices due to suppliers' lead ingot warehouse transfers before delivery. Domestic consumption is neutral overall, with conservative demand in the e-bike sector and relatively stable demand in July-August; in the automobile sector, demand is experiencing a tug-of-war: enterprises handling export orders are doing well, while those serving the Chinese market are underperforming. Overall, the exit of bears has led to a short-term lead price rebound and catch-up rally, but the performance of the consumption side determines the room for the lead price rebound.
![Lead Prices Give Back Most Gains, SHFE Lead Closes Lower Overnight [SMM Lead Morning News]](https://imgqn.smm.cn/usercenter/PKFMX20251217171721.jpg)
