Futures:
Overnight, LME lead opened at $1,983.5/mt, with prices moving sideways within the $1,976-1,987/mt range, fluctuating repeatedly around the average price line of $1,981/mt. The tug-of-war between longs and shorts was intense, with no clear unidirectional trend. It finally closed at $1,981/mt, down $3/mt, a decline of 0.15%.
Overnight, the most-traded SHFE lead 2026 contract opened higher with a gap at 16,505 yuan/mt. At the beginning of the session, SHFE lead prices briefly fluctuated downward, hitting a low of 16,435 yuan/mt, then fluctuated higher during the session, and pulled back slightly near the end, finally closing at 16,485 yuan/mt, recording a small bearish candlestick, up 10 yuan/mt, a gain of 0.06%.
On the macro front:
Trump stated that he canceled the military strike plan against Iran originally scheduled for tomorrow (May 19). Waller will be sworn in as Fed Chairman on Friday, with the ceremony presided over by Trump. The US Treasury Secretary announced another 30-day extension of the Russian seaborne oil sanctions waiver. UK Prime Minister Starmer emphasized he would not resign, saying he still plans to participate in the next UK general election. CSRC: Push forward the deepening reform of the Beijing Stock Exchange with greater efforts. NBS: From January to April, the national above-scale industrial value-added output was up 5.6% YoY.
Spot fundamentals:
Yesterday, SHFE lead remained in the doldrums, with the operating center shifting further down WoW. Suppliers showed low enthusiasm for shipments, with a few quoting at premiums. Secondary lead side, smelters shipped along with the market, but quotes remained relatively firm, with secondary refined lead quoted at parity with SMM #1 lead on an ex-factory basis, and a few quoted at premiums. Some downstream enterprises intended to buy the dip, but bargaining was frequent, and they preferred cargoes self-picked up from production site. Transactions in the Jiangsu, Zhejiang, Shanghai market were scarce.
Inventory: On May 18, LME lead inventory decreased by 750 mt to 264,250 mt; SMM lead ingot social inventory across five regions pulled back MoM.
Lead price forecast for today:
Last week's decline in lead prices triggered panic selling by recyclers, and the pressure from raw material inventory shortages at secondary lead smelters was alleviated on a phased basis. This week, production cuts and shutdowns at smelters caused by tight raw material supply improved somewhat, but the overall industry operating rate remained at a low level. Combined with declining imported lead inflows, the supply side showed marginal contraction. The demand side continued its weak trend, and the supply-demand double-weakness pattern persisted. SHFE lead prices are expected to maintain a fluctuating trend in the short term.
