SHFE Lead Consolidated at Highs; Today, the Most-Traded Contract Rose by 5 yuan/mt from the Previous Close [Lead Futures Brief Commentary]

SMM News, August 20:

SHFE lead contract 2610 consolidated throughout the day, opening at 15,970 yuan/mt and swinging wildly in the 15,945-16,000 yuan/mt range before noon; it drifted lower in the afternoon and closed at 15,935 yuan/mt, up 5 yuan/mt from the previous trading day’s closing price, a gain of 0.03%, forming a small bullish candlestick; total trading volume for the day was 54,878 lots, and open interest fell by 392 lots to 79,582 lots. In the spot market, the center of lead prices moved higher, and the SMM #1 lead average price rose by 50 yuan/mt. Divergence among suppliers intensified: those holding prices firm sharply raised premiums, while those pessimistic about the market outlook actively sold. Downstream wait-and-see sentiment strengthened, acceptance of high-priced lead declined, and cargo pick-up was mainly under long-term contract, with fewer circulating supplies in some regions and very few new spot order trades. Shipments of secondary lead improved and some held prices firm; however, actual supply and demand follow-through was limited, leaving limited upside room. On the upside, prices were constrained by weaker downstream acceptance of high prices and limited follow-through in spot transactions; on the downside, they were supported by spot suppliers holding prices firm and reduced circulating supplies. SHFE lead may continue to consolidate at highs tomorrow; attention should be paid to follow-through in spot transactions and changes in suppliers’ sentiment.