SHFE Lead Maintained Fluctuating Trend from Opening to Midday, with Increased Volume and Rising Prices in Late Trading [Lead Futures Brief Commentary]

SMM, May 20:

During the session, the most-traded SHFE lead 2606 contract opened at 16,430 yuan/mt. In early trading, SHFE lead prices moved sideways within the range of 16,395-16,430 yuan/mt, then dipped slightly during mid-session to a low of 16,370 yuan/mt. Prices subsequently fluctuated upward, touching a high of 16,540 yuan/mt near the close, and ultimately settled at 16,530 yuan/mt, posting a small bullish candlestick with a gain of 40 yuan/mt, or 0.24%. Fundamentals side, the momentum of lead ingot social inventory buildup gradually slowed down after the delivery date, and overall operating rates at secondary lead producers remained low, providing some fundamental support. However, bearish factors were also prominent at this stage, as end-use demand recovery at downstream end-users remained sluggish with an overall subdued procurement atmosphere. Additionally, major smelters successively lowered their scrap battery purchase prices, weakening raw material cost support for lead prices and further suppressing upside room. Considering multiple market factors, the current tug-of-war between longs and shorts was relatively balanced, and lead prices are expected to maintain a slightly weak consolidation trend in the short term.

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