Nonferrous metals generally rose, boosting SHFE lead to break through the 16,000 mark, under weak supply and demand, beware of a pullback [Lead Futures Brief Review]

SMM August 21 News:

The SHFE lead 2610 contract continued the strong sentiment from the night session and moved sideways at highs throughout the day. It opened at 16,115 yuan/mt, briefly dipped to 16,085 yuan/mt before midday, rebounded, and then moved sideways within a narrow range of 16,160–16,110 yuan/mt. It finally closed at 16,130 yuan/mt, up 195 yuan/mt from the previous trading day's closing price, an increase of 1.22%. Total trading volume was 82,983 lots, up 32,105 lots from the previous trading day, and open interest fell by 2,334 lots to 77,248 lots.

Driven by the rise in LME lead and the overall strength of the nonferrous metals sector, SHFE lead rose sharply, breaking through the 16,000 mark. The SMM No. 1 lead price rose 125 yuan/mt. Enterprise shipments were divergent, with some holding prices firm and others selling at market prices. The shipment mentality of secondary lead smelters changed, leading to chaotic market quotations, and the quotation range for secondary refined lead expanded significantly. Downstream enterprises were wary of high prices and adopted a wait-and-see attitude, stating that the traditional peak season was underperforming. Apart from just-in-time procurement, medium and large enterprises waited for new month's long-term contracts, and lead ingot market transactions weakened. In addition, the import window for lead ingots has recently opened, and import lead quotations have increased.

Short-term wild swings at highs are expected, and the risk of a correction from highs requires vigilance. In addition to closely monitoring the realization of peak season demand, attention should also be paid to the pace of import lead arrivals and the resumption of production at smelters.

Data Source Statement: Except for publicly available information, all other data are derived by SMM based on public information, market communication, and SMM's internal database model, and are for reference only and do not constitute decision-making advice.