Futures:
Overnight, the LME lead 3M contract traded in a range of 1896.0-1915.0 USD/mt on August 25, with a fluctuation of 19 USD/mt. During the Asian session, it moved sideways in the 1905-1910 USD/mt range. In early European trading, it briefly rose to 1915.0 USD/mt, then continued to pull back, accelerating its decline during the joint US and European session, eventually closing at 1896.0 USD/mt, down 14.5 USD/mt from the previous trading day's closing price, a 0.76% decrease. Trading volume was 6,172 lots, and open interest was 173,820 lots.
Overnight, the SHFE lead 2610 contract drifted higher during the night session, opening at 16,130 yuan/mt. After the open, it moved sideways in the 16,085-16,120 yuan/mt range. Around 23:00, it quickly rose to 16,160 yuan/mt, then rapidly pulled back, eventually consolidating in a narrow range of 16,065-16,095 yuan/mt, closing at 16,095 yuan/mt, down 35 yuan/mt from the previous trading day's closing price, a 0.22% decrease. Trading volume was 25,106 lots, and open interest was 74,529 lots.
On the macro front:
Signs of de-escalation in the Middle East situation emerged, with the US and Iran reaching consensus on ceasefire agreement terms, including freedom of navigation in the Strait of Hormuz. Mines in the international waters of the strait have been removed, and the geopolitical risk premium pulled back. The US Fed sent hawkish signals, with Collins stating that it would be appropriate to raise interest rates "as soon as possible" in the absence of a persistent decline in inflation. Four regional Fed banks voted in July to raise the discount rate, and Barkin warned that continued increases in US Treasury debt could lead investors to stop buying. US economic data weakened, with new home sales in July falling to a 6-month low and consumer confidence hitting its lowest level this year.
In China, Shanghai introduced policies to expand the trading scale of key metal categories such as copper and aluminum, and accelerate the establishment of futures contract sequences for emerging metals like lithium, cobalt, and nickel. The third China-US 1.5-Track Dialogue was held in Beijing, with continued progress in bilateral communication. Chengdu introduced ten new real estate policies, including a 20% discount on provident fund loan interest. The National Development and Reform Commission (NDRC) held a promotion meeting for "six-network coordination" to study infrastructure investment and financing mechanisms, benefiting expectations for non-ferrous metal demand.
Spot market fundamentals:
Yesterday, the SMM #1 lead price fell by 75 yuan/mt, with SHFE lead also pulling back. Trading in the spot market was light on both sides. Primary lead supply was limited in circulation, with suppliers holding prices firm but showing reduced willingness to sell, and some suspending quotes. Regional divergence was evident. Secondary lead smelters mostly held prices firm while selling, with secondary refined lead trading at a discount of 100-0 yuan/mt to the SMM #1 lead average price. Downstream buyers continued to wait and see, holding out for new long-term contracts for the coming month. Only a few made just-in-time procurement, with limited inquiries and reduced trading activity. Imported lead quotes increased, at a discount of 300 yuan/mt to the SHFE lead 2609 contract.
In terms of inventory: As of August 25, LME lead inventory stood at 412,200 mt, a decrease of 3,600 mt from the previous trading day; the total SHFE lead ingot warrant inventory was 57,016 mt, unchanged from the previous trading day.
Today's lead price forecast:
Overnight, LME lead pulled back and closed with a big bearish candlestick, down 0.76%; SHFE lead in the night session was resilient, only slightly down 0.22%. On the spot side, market circulating supply was limited, with suppliers holding prices firm and some suspending quotes; coupled with a large LME inventory drop of 3,600 mt, the supply side provided support for the lower end. Downstream players were wait-and-see, with only a few making just-in-time procurement, while increased import lead quotes diverted demand, limiting the upside room for lead prices. In the short term, lead prices are expected to continue consolidating at highs, and attention should be paid to spot transaction follow-up, the pace of import lead arrivals, LME trends, and other market information releases.
![LME lead closed with a large bearish candlestick, down 0.76%. SHFE lead night session only edged down 0.22% [SMM Lead Morning News].](https://imgqn.smm.cn/usercenter/PKFMX20251217171721.jpg)