[record of SMM lead internal morning meeting on June 17]

Summary of the lead morning meeting:

Macro:

It is reported that the Indian government has decided to impose tariffs on 28 US products exported to India from 16 June last year. India drew up the above-mentioned tariff list in June last year in revenge for the increase of steel and aluminum tariffs imposed by the United States on India. India has repeatedly postponed the date of levying tariffs, hoping to push forward relevant negotiations with the United States. On 5 June this year, the US Government announced the abolition of GSP treatment for India, resulting in more tensions in trade relations between the two countries.

Us economic data on Friday were mixed: retail sales rose 0.5 per cent in May from a month earlier and revised up to 0.3 per cent in April, suggesting consumer spending remained healthy. Manufacturing output rose 0.2 per cent in May, the first expansion this year. The initial consumer confidence index at the University of Michigan fell in June and long-term inflation expectations fell to an all-time low.

Domestic economic data: the growth rate of industrial production in May was 5.0% compared with the same period last year, which continued to fall from April to the lowest since 2002, and the industrial growth rate declined, which not only had the impact of a high base, but also reflected that industrial production was still weakening. The growth rate of national fixed asset investment fell to 5.6% from January to May, of which the monthly growth rate in May fell to 4.4%. Among the three categories of investment, the growth rate of manufacturing investment rebounded but still on the low side, and the growth rate of manufacturing investment rebounded slightly to 2.7% from January to May. However, it is still near an all-time low, and the drag of the decline in profits in the previous period is still emerging; the growth rate of infrastructure investment has slowed slightly; the growth rate of real estate investment has continued to decline. The nominal growth rate, real growth rate and above-quota retail growth rate in May were significantly higher than those in April, and the sales area of commercial housing in May was negative compared with the same period last year.

The central bank decided to increase the rediscount quota by 200 billion yuan and the standing lending facility quota by 100 billion yuan on Friday to strengthen liquidity support for small and medium-sized banks and maintain sufficient liquidity for small and medium-sized banks. Small and medium-sized banks can use qualified bonds, interbank certificates of deposit, bills and so on as collateral to apply to the people's Bank of China for liquidity support;

The central bank launched a 28-day reverse repo operation of 100 billion yuan on Friday, with a net investment of 100 billion yuan due today. A total of 255 billion funds matured in the open market this week, which coincided with the adjustment of the deposit reserve ratio on Monday. The open market operation will still take care of liquidity, and the funds due are expected to continue.

Fundamentals:

Last week lead prices continued to run within the range, but due to the terminal consumption downturn, market trading is relatively light, storage enterprises wait and see carefully; original lead, this week some refineries continue to repair, but supply compression can not offset the downturn in consumption, as of Friday, the refinery bulk order mainstream quotation to SMM1# lead average price discount 50 yuan / ton to flat water; Trade is also affected by this, the holder frequently downgraded spot rising water, as of Friday, domestic lead ordinary brand mainstream quotation to 1907 contract discount 30 yuan / ton to Pingshui near; Recycled lead, after the Dragon Boat Festival holiday accumulation, the market reduced lead supply slightly relaxed, refined lead refinery profits slightly repaired, refined lead supply increased, in addition to the downstream storage enterprises are still in the traditional off-season, consumer demand is weak, renewable refined lead discount range expanded, as of Friday, the mainstream trading price of recycled refined lead on the average SMM1# lead price affixed to 100150 yuan / ton factory;

Last week, the social inventory of lead ingots in Shanghai and Guangdong fell slightly to 8600 tons compared with the previous period, while the total social inventory rose by nearly 1,000 tons to 35300 tons.

Lead price:

After touching the 60-day line in the early stage, the Lun lead has a high decline pattern, and it still needs to be cautious to break down in the short term. Shanghai lead continues the low concussion pattern, and needs to wait for fundamental changes in the fundamentals in the short term before Shanghai lead can choose the direction.

The price of SMM1# lead is expected to fall by 50 yuan per ton today.