SMM News, August 17:
During the session, the SHFE lead 2608 contract for the current month closed at 15,800 yuan/mt, with a settlement price of 15,825 yuan/mt, open interest of 3,095 lots, delivery volume of 15,475 mt, and warrant inventory of 65,864 mt. The SHFE lead 2608 contract completed delivery smoothly. The SHFE lead 2609 contract posted a trading volume of 41,201 lots and open interest of 35,793 lots; the SHFE lead 2610 contract posted a trading volume of 49,825 lots and open interest of 75,440 lots. The most-traded SHFE lead contract officially rolled over to the 2610 contract.
During the session, the SHFE lead 2609 contract drifted higher, opening at 15,825 yuan/mt and quickly surging to 15,940 yuan/mt after the open, before pulling back to 15,865 yuan/mt. It then moved sideways in the 15,875-15,910 yuan/mt range, and rebounded again in late afternoon trading to 15,920 yuan/mt, staying high and moving sideways in a narrow range. It finally closed at 15,920 yuan/mt, up 95 yuan/mt from the previous trading day’s closing price, a gain of 0.60%, with the daily K-line posting a small bullish candlestick. Trading volume was 41,201 lots, while open interest fell by 3,343 lots to 35,793 lots. With lead prices strengthening and delivery of the 2608 contract, quotations for warrant cargo were relatively limited. In some regions, smelter inventories declined and maintenance was approaching, tightening circulating supply and strengthening the willingness to hold prices firm, while some smelters in south China actively sold, and the divergence between shipments in the south and north widened somewhat. Secondary lead smelters shipped in line with the market, with quotations little changed WoW. Downstream players returned after the weekend and purchased as needed; enquiry and transaction activity improved, and some enterprises reported better battery orders, with support from rigid demand strengthening somewhat.
In the short term, supply tightens in some regions and improved downstream rigid demand will support prices, but high lead prices still suppress purchase willingness. Supply divergence caused by active shipments from south China smelters may limit upside room. SHFE lead is expected to consolidate at highs in the short term; attention should be paid to downstream actual purchase strength and smelter inventory changes.
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