Routine Procurement Demand Rebounded on the Consumption Side, While Supply Increased and Decreased in Parallel; Lead Prices Maintained a Fluctuating Trend [SMM Lead Morning Meeting Minutes]

Futures:

Overnight, the LME lead 3M contract opened at $1,885.5/mt. After the open, it drifted higher, hitting an early-session high of $1,891.0/mt. It then stayed high and moved sideways in a narrow range, with a low of $1,885.0/mt, and finally closed at $1,885/mt, up $5.5/mt from the previous trading day, a gain of 0.29%. The trading range was $1,885.0–$1,891.0/mt, with a spread of $6.0/mt.

Overnight, the SHFE lead 2610 contract opened at 15,880 yuan/mt. After the open, it quickly fell to 15,845 yuan/mt and then rebounded to 15,938 yuan/mt. After moving sideways in a narrow range, it moved sideways in a narrow range at 15,865–15,880 yuan/mt in late trading, and finally closed at 15,875 yuan/mt, down 75 yuan/mt from the previous trading day’s closing price, a decline of 0.47%.

Macro:

The 60-day deadline for the US-Iran peace agreement officially expired, and Iran ruled out the possibility of an extension; US President Trump said the US is not currently seeking to extend the memorandum of understanding with Iran, and geopolitical uncertainty in the Middle East intensified. As recent US economic data were weak, the market’s bets on further rate hikes by the US Fed continued to cool. China, the UK, and Japan all reduced their holdings of US Treasuries in June; the US 30-year Treasury yield rose to 5.31%, a 19-year high.

Li Qiang chaired the 12th plenary meeting of the State Council, stressing the need to thoroughly implement the CPC Central Committee’s decisions and deployments and strive to accomplish the annual targets and tasks for economic and social development. The National Development and Reform Commission (NDRC) deployed efforts to accelerate the rollout of new-type policy-based financial instruments in 2026 and increase support for private investment projects. China’s National Bureau of Statistics: In July, the value-added industrial output of enterprises above designated size grew by 4.5% YoY in real terms; MoM, the sales prices of newly built commercial residential housing in first-tier cities shifted from a 0.1% increase in the previous month to flat.

Spot fundamentals:

SHFE lead continued to consolidate on a strong note, and today was the delivery day for the SHFE lead 2608 contract, with relatively few quotations for warrant cargoes. In addition, EXW cargoes self-picked up from primary lead smelters differed between the northern and southern markets; in mainstream producing areas, cargoes were quoted at premiums of 0–50 yuan/mt against the SMM #1 lead average price, ex-works. For secondary lead, smelters sold in line with the market, and discounts in quotations changed relatively little WoW; secondary refined lead was quoted at discounts of 100–0 yuan/mt against the SMM #1 lead average price, ex-works. After returning from the weekend, downstream enterprises gradually made purchases as needed, inquiries increased, and procurement was mainly EXW cargoes self-picked up from production site; spot market trading activity improved somewhat.

Inventory: On August 17, LME lead inventory fell by 1,700 mt, or 0.41%, to 410,975 mt; according to SMM, as of August 17, total social inventory of lead ingots across five locations reached 78,600 mt, up 5,800 mt from August 10 and up 3,400 mt from August 13.

Lead Price Forecast for Today:

Demand side, as downstream enterprises ended their high-temperature holidays, some enterprises resumed normal production, and routine procurement demand rebounded, easing post-delivery inventory buildup pressure for lead ingots to some extent. Supply side saw both increases and decreases: maintenance at primary lead enterprises was set to reduce supply to a certain extent; coupled with smelters holding prices firm while selling, the widening of spot lead discounts was limited. As losses at secondary lead enterprises improved somewhat, some enterprises resumed production, increasing market circulating supply, and secondary refined lead maintained trading at relatively larger discounts. Overall, lead prices were expected to maintain a fluctuating trend.