[record of SMM lead internal morning meeting on June 3]

Summary of the lead morning meeting:

Macro:

Global yield curve warnings have sprung up, with the inverted three-month and 10-year US yield curve reaching its highest level since 2007 on Friday, while the 10-year US Treasury yield hit 2.145 per cent on Friday, the lowest since September 2017. Yield curves in Germany, the UK and Canada are also worrisome; bond traders expect the Fed to cut interest rates this year; federal funds rate futures suggest the market expects to cut interest rates by more than 0.5 percentage points this year.

The President of the United States terminated the GSP status of India as a developing country and abolished duty-free treatment for nearly 2000 Indian exports to the United States because India failed to ensure fair and reasonable market access to the United States. However, in the end, the US inspection of India may have to be attributed to the decision of the Indian drug price regulator to substantially reduce the price of medical devices.

The US president says Mexico could lose its car industry if it does not take action on illegal immigration, while the US carmaker group says imposing tariffs on Mexico would be costly for the US auto industry.

Us economic data on Friday: personal spending and income growth was higher than expected in April, the Fed's preferred core inflation index rose, and the final value of consumer confidence at the University of Michigan was below its initial value in May.

China has announced that it will include foreign enterprises that have seriously damaged the legitimate rights and interests of Chinese enterprises in the "list of unreliable entities" and, for non-commercial purposes, block, cut off supplies or other discriminatory measures against Chinese entities, thus causing substantial damage to relevant industries in China. Foreign legal persons, other organizations or individuals that pose a threat or potential threat to national security will be included;

China's retaliatory action against the United States took effect on Saturday Beijing time, followed by a white paper saying that the responsibility for the setback in economic and trade negotiations lies entirely with the US government, and that China will not succumb to extreme pressure. China does not want to fight a woolen war with the United States, but it is not afraid to fight either.

Fundamentals:

Last week, the Shanghai lead price fluctuated in a wide range, and the market purchasing sentiment was still cautious, so the downstream was mainly rigid demand purchasing. In terms of primary lead, some refineries began overhauling last week, leaving refineries with capital to be sold at a low price. As of Friday, the mainstream price quoted by the refinery was flat to the average price of SMM1# lead. In terms of trade, the quotation of the holder follows the market, but the downstream consumption is depressed, as of Friday, the mainstream quotation of domestic lead ordinary brand for 1906 contract water 60-80 yuan / ton; In terms of recycled lead, environmental protection inspections in Jiangxi, Guizhou and other places have been completed, and some refineries have gradually resumed, but because production is still not profitable, the amount of recovery is limited, as of Friday, Recycled lead mainstream quotation to SMM1# lead average price discount 50 yuan / ton to flat water factory.

Lead price:

Lun lead continues the pattern of low shock, unilateral operation trend is not clear, long and short funds although there are differences but the market trading is not fierce enough, due to macro uncertainty, short-term material is still dominated by consolidation; Shanghai lead still continues the shock range of the box, the willingness of low short positions to leave the market is strong, and the future market still needs to be cautious of high short positions.

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