Some Secondary Lead Smelters Resumed Production This Week, Weekly Production Up Slightly WoW [SMM Lead Morning Brief]

SMM May 22 update:

Overnight, the LME lead 3M contract held up well overall, with prices declining first before rising. During the Asian session, LME lead opened at $1,980/mt, briefly edged higher before pulling back. Entering the European session, it began to fluctuate upward, accelerating its rally toward the close, touching a high of $2,006.5/mt and ultimately closing at $2,005/mt, posting a small bullish candlestick, up $27.5/mt or 1.39%.

Overnight, the most-traded SHFE lead 2607 contract opened higher with a gap at 16,700 yuan/mt, briefly dipping to 16,670 yuan/mt at the start before strengthening in a fluctuating manner, touching a high of 16,745 yuan/mt. It slightly narrowed gains toward the close, ultimately settling at 16,740 yuan/mt, posting a small bullish candlestick, up 95 yuan/mt or 0.57%.

Market side this week, some smelters in east China chose to hold back from selling and stockpile due to weak lead prices, while enterprises in other regions saw slight WoW destocking in finished product inventories. Dragged by inventory buildup in east China, overall industry inventory edged up slightly. Lead ingot social inventory gradually pulled back after the delivery period ended, but the destocking pace remained slow. As some smelters resumed production, China's secondary lead production edged up slightly WoW, to some extent suppressing upside room for lead prices. Sentiment side, concentrated short-covering yesterday drove a rebound in lead prices, and lead prices are expected to maintain a fluctuating trend in the short term.