SMM lead price forecast

This week, the key macroeconomic data due include China's Caixin Manufacturing PMI in May, the final eurozone's Manufacturing PMI in May, the US May ISM Manufacturing PMI, the US May ADP non-farm payrolls, the US May unemployment rate, and the US seasonally-adjusted non-farm payrolls in May. Due to the Dragon Boat Festival holiday in China, there will be no night trading on the SHFE on the evening of June 7.

Since May, LME lead inventories have been decreasing, with a cumulative decline of 84,100 mt, including a decrease of 10,500 mt last week. Meanwhile, the contango of LME cash to the three-month contract widened, once reaching as low as $60.86/mt, and was reported at $58.47/mt as of May 30. LME lead failed to break through $2,360/mt during the week, and due to the expected resumption of some overseas lead-zinc mines in Q2, the subsequent price gains may slow. this week, LME lead is expected to trade between $2,250-2,370/mt.

For SHFE lead, recent lead ingot inventories have turned to an accumulation trend. Additionally, with lead smelters resuming production after maintenance in early June, lead ingot supply will be relatively ample. Meanwhile, lead concentrate TC has fallen again, and battery scrap prices are more likely to rise. As such, lead prices may dip first and then rise this week, with the most-traded SHFE lead contract expected to trade between 18,400-19,000 yuan/mt.

Spot price is expected to move at 18,450-18,700 yuan/mt. For primary lead, after the ending of maintenance at smelters, the tight supply may ease, and spot premiums are expected to decline. For secondary lead, the expectation of production resumption at smelters remains, while the tight supply of battery scrap remains. Secondary refined lead is expected to maintain last week's discount level, ensuring profit margins. In terms of lead consumption, some companies plan to close for the Dragon Boat Festival.

According to the SMM model, the forecasted price range for the average price of SMM 1# lead ingot is [18,160, 18,830], the extreme price range is [17,800, 19,120], the normal price range is [18,040, 18,930], the conservative price range is [18,280, 18,730], the support range is [18,040, 18,280], and the resistance range is [18,730, 18,930]. The unit is yuan/mt.

The expected price range for the closing price of the most-traded SHFE lead contract is [18,460, 19,205], the extreme price range is [18,130, 19,450], the normal price range is [18,350, 19,290], the conservative price range is [18,570, 19,120], the support range is [18,350, 18,570], and the resistance range is [19,120, 19,290].