Futures:
Overnight, LME lead opened at $1,962/mt. During the Asian session, LME lead prices moved sideways within the $1,961-1,965/mt range before edging higher. Entering the European session, LME lead prices briefly dipped before rising on fund-driven momentum, touching a high of $1,981/mt. Prices pulled back slightly toward the end of the session, ultimately closing at $1,977.5/mt, posting a bullish candlestick with a gain of $16/mt, or 0.82%.
Overnight, the most-traded SHFE lead 2606 contract opened at 16,506 yuan/mt. After the open, it dipped slightly, touching a low of 16,525 yuan/mt, before fluctuating upward driven by a broad rally across non-ferrous metals, reaching a high of 16,640 yuan/mt. It ultimately closed at 16,630 yuan/mt, posting a bullish candlestick with a gain of 90 yuan/mt, or 0.54%.
On the macro front:
Trump said US-Iran negotiations had entered the final stage. Foreign media reported that Trump insisted on a diplomatic solution to the Iran issue, while Netanyahu strongly opposed it. NVIDIA's Q1 revenue and Q2 outlook both exceeded expectations, yet US stocks remained flat in after-hours trading. Foreign media reported that OpenAI would submit its IPO filing as early as Friday. SpaceX officially submitted its IPO filing, with Q1 revenue of $4.7 billion. The Ministry of Commerce stated that both China and the US agreed in principle to discuss a framework arrangement for reciprocal tariff reductions on products of equivalent scale under the Trade Council. The Ministry of Finance reported that securities transaction stamp tax in the first four months was up 74.8% YoY.
Spot fundamentals:
Yesterday, the SHFE lead price center shifted lower again, approaching previous lows. Suppliers became less willing to ship, with fewer offers, and some suppliers narrowed their discount quotes. Secondary lead smelters shipped along with the market, with secondary refined lead quoted at a premium of 0-50 yuan/mt over SMM #1 lead on an ex-factory basis. Apart from lead smelters with consumption location advantages that had rigid demand transactions, trades at premiums were difficult. Downstream enterprises showed strong wait-and-see sentiment, with some having already made purchases yesterday. Inquiries decreased today, and spot market transactions were moderate.
Inventory: On May 20, LME lead inventory increased by 22,275 mt to 286,475 mt. On May 18, SMM social inventory of lead ingots across five regions pulled back WoW.
Lead price forecast for today:
Overnight, the broad rally across the non-ferrous metals sector drove SHFE lead higher. In late May, lead prices fell to low levels, spot trades in the market recovered, and smelter and social inventory continued to decline, serving as the main support for lead prices to stop falling. However, secondary lead enterprises gradually resumed production, limiting the overall destocking pace, and the upside for lead prices will also be constrained by the pace of production resumptions. Currently, the off-season pattern in the lead market remains unchanged, with downstream lead-acid battery enterprises generally maintaining production cuts. Lead prices are expected to maintain a fluctuating trend in the short term.
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