Futures:
Overnight, LME lead opened at $2,009.5/mt. With mixed news on US-Iran negotiations, LME lead movements tracked fundamentals more closely, especially as the tight spot lead supply situation in Southeast Asia remained unchanged, supporting LME lead's rise. LME lead climbed steadily from around $2,010/mt, and after entering the European session, the rally expanded, reaching an intraday high of $2,046/mt, again refreshing the nearly 4-month high, before finally closing at $2,037/mt, up 1.24%.
Overnight, the most-traded SHFE lead 2607 contract opened at 16,630 yuan/mt. Driven by LME lead's rally, SHFE lead fluctuated upward after the opening and reclaimed all moving averages, reaching an intraday high of 16,715 yuan/mt. SHFE lead ultimately closed at 16,690 yuan/mt, up 0.69%; open interest stood at 62,400 lots, down 1,594 lots from the previous trading day.
On the macro front:
US-Iran negotiations remained shrouded in uncertainty. Iranian media reported that US-Iran communications "have been suspended for several days," while Trump said US-Iran dialogue was ongoing, and Rubio stated that sanctions relief was not exchanged for reopening the strait. Iranian media reported that Iran opened the Hormuz transit permit system with over 300 foreign vessels applying in one month, while US media reported that strait shipping remained sluggish. Additionally, US April JOLTS job openings rose above expectations to a two-year high, with labour market resilience supporting expectations for US Fed interest rate hikes.
:
Yesterday in the lead spot market, SHFE lead continued to be in the doldrums. Circulating cargoes in Jiangsu, Zhejiang, Shanghai were relatively small, with limited quotes. Suppliers mainly sold cargoes self-picked up from production site of primary lead smelters, with mainstream origins quoted at parity against SMM #1 lead average price ex-works, while some minor brands were at discounts of 30-10 yuan/mt. Secondary lead side, smelters' willingness to sell declined, with secondary refined lead quoted at discounts of 25-0 yuan/mt against SMM #1 lead ex-works, and transactions were difficult. Meanwhile, downstream enterprises had strong wait-and-see sentiment, with inquiries also decreasing compared to the previous day. Some purchased under long-term contracts, while other spot order transactions weakened notably.
Inventory: As of June 2, LME lead inventory was 313,950 mt, unchanged from the previous trading day; SHFE lead ingot warrant inventory totalled 57,295 mt, down 50 mt from the previous trading day. SMM lead ingot social inventory decreased by 1,600 mt compared to May 28.
Today's lead price forecast:
Recently, news on US-Iran negotiation progress has been mixed, with macro uncertainties persisting. Meanwhile, fundamentals in and outside China also showed significant divergence: ex-China high-grade lead ingot supply remained tight, especially as maritime shipping disruptions continued, with the impact on raw material transportation and lead ingot supply unchanged. In the Chinese market, as both primary lead and secondary lead enterprises resumed production, lead ingot supply increased, and spot trading shifted to a discount (against SMM #1 lead), with lead prices showing that LME outperforms SHFE. Attention should be paid to subsequent changes in the lead price import-export ratio.
Data Source Disclaimer: Data other than publicly available information is derived from public information, market communication, and SMM's internal database models, processed by SMM for reference only and does not constitute decision-making advice.
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