LME Lead Inventory Surged by 29,700 mt Yesterday, LME Lead at Low of $1,990.5/mt [SMM Lead Morning Brief]

SMM May 29:

Overnight, LME lead opened at $2,000/mt and saw wild swings during the Asian session. Entering the European session, it first declined then rebounded, dipping to a low of $1,990.5/mt before bears reduced their positions. LME lead rallied toward the close, touching a high of $2,022/mt and ultimately settling at $2,019/mt, up 0.9%.

Overnight, the most-traded SHFE lead 2607 contract opened lower with a gap at 16,560 yuan/mt, initially falling to a low of 16,505 yuan/mt before rebounding in volatile trading, touching a high of 16,595 yuan/mt toward the close and ultimately settling at 16,570 yuan/mt, down 0.15%.

This week, some primary lead smelters in Henan and Hunan were under maintenance, leading to a regional tightening of lead ingot supply. Meanwhile, downstream enterprises picked up goods in the first half of the week, contributing to a declining trend in lead ingot inventory at social warehouses. Recently, secondary lead smelters in east China have been gradually resuming production, and the regional supply gap for secondary lead has been progressively narrowing. Secondary lead production is expected to turn to an upward trend in June. However, consumption in the lead-acid battery market remained weak, and producers had limited rigid demand for lead ingots. In particular, the spread between futures and spot prices for lead widened to 200 yuan/mt during the week, which also prompted some suppliers to move inventory and ship to delivery warehouses. Next week, we need to pay more attention to the pressure on lead prices from the inventory buildup risk driven by the resumption of production at smelters as the new month begins.

Data source disclaimer: Data other than publicly available information was derived by SMM through processing based on public information, market communication, and SMM's internal database models. It is for reference only and does not constitute decision-making advice.