Summary of SMM Lead Morning Meeting on July 19, 2023

Futures trading:

Overnight, LME Lead opened at $2101 per ton, with the US dollar showing a low consolidation trend recently. At the same time, LME lead inventory continued to accumulate, and the basic news was flat. LME Lead fluctuated between $2090- $2110 per ton for most of the day, ultimately closing at $2095 per ton, a decrease of 0.24%.

Overnight, the inventory of lead warehouse receipts on the Shanghai Futures Exchange increased by over 2000 tons. The 2308 contract, the main force of Shanghai Futures Lead, was opened at 15680 yuan/ton, but there were still consumer expectations. Long positions increased and Shanghai Lead rebounded to 15765 yuan/ton in a volatile manner, until it rebounded in the late trading session and finally closed at 15725 yuan/ton, an increase of 0.06%; Its position reached 84.817 million hands, a decrease of 691 hands compared to the previous trading day.

Today's lead price forecast:

On the macro level, the retail sales growth rate in the United States was poor in June, but core retail remained strong, and the market still expects a rate hike in July to be firm and final. The National Development and Reform Commission: Quickly formulate and introduce policies to restore and expand consumption, and adhere to the normalization of holding private entrepreneur symposiums.

In terms of fundamentals, entering the third quarter, the traditional peak season of domestic lead consumption is expected to emerge, and consumption may become the main factor supporting lead prices. However, recent terminal consumption has not significantly improved, and downstream enterprises mostly rely on sales to produce, with limited enthusiasm for purchasing high-priced lead ingots. At the same time, domestic and foreign lead ingot inventories continue to accumulate, dragging down the upward trend of lead prices. In addition, there are still maintenance factors in lead smelting enterprises, coupled with the tight supply of raw materials and the coexistence of short-term long and short factors. Before there are any factors that break the balance, lead prices may continue to consolidate.

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