Futures:
Overnight, LME lead opened at $1,905/mt and consolidated during the day, trading mostly in the $1,905-1,910/mt range. Later, supported by a weaker US dollar index, LME lead drifted higher and hit an intraday high of $1,922.5/mt, the highest in nearly two months. In late trading, LME lead gave back most of its gains to close at $1,902/mt, down 0.05%.
Overnight, driven by gains in LME lead, the most-traded SHFE lead 2609 contract opened higher at 15,975 yuan/mt. It rose sharply in early trading and broke above the 16,000 yuan/mt mark to hit a high of 16,015 yuan/mt, the highest in nearly one month. However, resistance above 16,000 yuan/mt was strong, and SHFE lead failed to hold above that level, giving back some gains in late trading to close at 15,965 yuan/mt, up 0.57%; open interest was 43,741 lots, down 1,431 lots from the previous trading day. In addition, open interest in the SHFE lead 2609 contract has continued to shift to the SHFE lead 2610 contract recently, with open interest in the latter now at 68,875 lots. Attention should be paid to the subsequent rollover of the most-traded contract.
Macro Front:
The PBOC's Q2 monetary policy implementation report showed that the effects of its moderately loose monetary policy continued to emerge, while the quality and efficiency of financial services for the real economy kept improving. Financial support for key areas such as expanding domestic demand, technological innovation, and micro, small and medium-sized enterprises will be strengthened. In the US, July CPI was fully in line with expectations, with the YoY increase narrowing to 3.4% and core CPI YoY growth slowing to 2.5%. Traders maintained bets on a 45% probability of a rate hike by the US Fed in September. The auction yield on the 10-year US Treasury note hit its highest level since the 2007 financial crisis.
:
In the lead spot market yesterday, SHFE lead continued to consolidate on a strong note. Suppliers sold in line with market prices. Near the delivery period, warrant cargoes in circulation were limited, and quotes were relatively firm. Meanwhile, EXW quotes from primary lead smelters remained divergent. Some suppliers held prices firm when selling, and quotes from mainstream producing areas were at premiums of 0~50 yuan/mt against the SMM #1 lead average price, EXW. In secondary lead, smelters showed improved selling interest. Secondary refined lead was quoted at discounts of 100~0 yuan/mt against the SMM #1 lead average price, EXW, with a few at discounts of more than 100 yuan/mt. Downstream enterprises were cautious toward high prices and stayed on the sidelines. Inquiries were moderate, but actual transactions were thin. Some enterprises bargained for larger discounts, making it difficult for buyers and sellers to conclude deals.
Inventory: As of August 12, LME lead inventory was 417,075 mt, down 3,225 mt from the previous trading day; total SHFE lead ingot warrant inventory was 61,228 mt, up 301 mt from the previous week.
Today's Lead Price Forecast:
On the macro front, news was mixed. A weaker US dollar drove broad gains across base metals, and lead prices may continue to consolidate at highs. Fundamentals, supply-side expectations for production cuts remain, but near the delivery period, visible lead ingot inventory accumulated as expected. Coupled with lackluster performance in the traditional peak season of the lead-acid battery market, this formed certain constraints on upside room for lead prices. In addition, as lead prices rebound, most losses at secondary lead enterprises have been repaired, and some smelters have shown signs of production resumption. Going forward, attention should be paid to the recovery of secondary lead supply, and caution is needed regarding the risk of lead prices retreating after a rapid rise.
Data source statement: Except for public information, all other data are processed by SMM based on public information, market communication, and SMM’s internal database models, for reference only and do not constitute decision-making advice.
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