Lead Ingot Inventory Pullback Supports Lead Prices, Off-Season Pattern Constrains Upside Room, Lead Prices Expected to Trade in a Range [SMM Lead Morning Brief]

SMM, May 21:

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 up slightly. Entering the European session, LME lead prices dipped briefly before rising on fund-driven momentum, reaching 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 small 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 opening, it dipped slightly, touching a low of 16,525 yuan/mt. It then fluctuated upward, driven by a broad rally across the non-ferrous metals sector, reaching a high of 16,640 yuan/mt and ultimately closing at 16,630 yuan/mt. It posted a small bullish candlestick with a gain of 90 yuan/mt, or 0.54%.

The overnight broad rally across the non-ferrous metals sector drove SHFE lead higher. In late May, lead prices fell to low levels, spot trades recovered, and smelter and social inventory continued to pull back, serving as the main drivers supporting lead prices to stop falling. However, the gradual production resumptions at secondary lead enterprises limited 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.