Futures:
Overnight, LME lead opened at $1,907/mt. During Asian trading hours, LME lead traded sluggishly and mostly moved sideways within the $1,905-1,910/mt range. Entering European trading hours, the decline in LME lead widened; especially at night, its trading center kept moving lower, and it found support after falling to near the middle Bollinger Band, eventually closing at $1,890/mt, down 0.6%.
Overnight, the most-traded SHFE lead 2609 contract opened at 15,890 yuan/mt. Affected by lead ingot inventory buildup, SHFE lead drifted lower after the open and broke below the 5-day and 40-day moving averages in succession, trading below 15,850 yuan/mt, before eventually closing at 15,835 yuan/mt, down 0.81%; open interest was 41,327 lots, down 196 lots from the previous trading day. In addition, open interest in the SHFE lead 2609 contract has kept shifting to the SHFE lead 2610 contract recently, and the SHFE lead 2610 contract currently holds open interest of 73,855 lots. Attention should be paid to the subsequent rollover of the most-traded contract.
On the macro front:
The YoY increase in US July PPI narrowed to 4.7%, with falling energy costs as the main driver; the market no longer fully priced in a US Fed rate hike this year. Signs of weak demand reappeared, and the awarded yield on the 30-year US Treasury auction hit the highest since 2001. Divergence among US Fed officials emerged: Barkin supported holding rates steady, while Hammack insisted on hiking rates.
:
In the lead spot market yesterday, SHFE lead kept strengthening; suppliers continued to hold prices firm when selling, and quotes were limited as delivery approached. Meanwhile, the north-south divergence in EXW cargo shipments by primary lead smelters widened. Offers in mainstream producing regions were at parity with the SMM #1 lead average price on an EXW basis, while some were at discounts of 50-30 yuan/mt. In secondary lead, smelters sold at prevailing prices and market supply increased; secondary refined lead was quoted at discounts of 100-25 yuan/mt against the SMM #1 lead average price on an EXW basis. Most enterprises relied mainly on long-term contracts for procurement, while some made just-in-time purchases of spot cargoes; overall market trading activity was moderate.
Inventory: As of August 12, LME lead inventory stood at 414,375 mt, down 2,700 mt from the previous trading day; total SHFE lead ingot warrant inventory was 65,691 mt, up 4,463 mt from the previous trading day. Total SMM lead ingot social inventory across five regions reached 75,200 mt, up 4,700 mt from August 6 and up 2,400 mt from August 10.
Lead Price Forecast for Today:
Recently, as delivery approaches, suppliers have accelerated moving lead ingots to delivery warehouses, driving lead ingot social inventory to build up as expected and putting some pressure on lead prices. Meanwhile, lead prices continued to strengthen; downstream enterprises were wary of high prices and cautious in purchasing, and their buying interest declined, further driving an increase in social inventory of lead ingots. In mid-to-late August, maintenance increased at primary lead smelters, creating expectations of supply-side tightening; at the same time, as lead prices rebounded, losses at secondary lead enterprises gradually narrowed, and some enterprises showed stronger intentions to resume production. Overall, supply-side tightening coexisted with expectations of secondary lead production resumption, providing limited support to lead prices.
Data source statement: Except for publicly available information, all other data are processed by SMM based on public information, market communication, and SMM's internal database models, and are for reference only and do not constitute decision-making advice.
![LME Lead Center Shifts Lower, SHFE Lead Weakens Under Pressure from Inventory Buildup [SMM Lead Morning Update]](https://imgqn.smm.cn/usercenter/TmYox20251217171721.jpeg)
