Increased Maintenance at China's Secondary Lead Plants VS Easing Spot Lead Premiums in Southeast Asia, Lead Prices May Remain in the Doldrums [SMM Lead Morning Meeting Summary]

Futures:

Overnight, LME lead opened at $1,964.5/mt. During the Asian session, LME lead continued the previous day's sluggish trend, with the overall trading center shifting lower and breaking below the 60-day moving average to a low of $1,945/mt. Entering the European session, ex-China lead inventory continued to decline, and LME lead gradually recovered part of its losses, but positive factors were limited. LME lead ultimately closed at $1,947.5/mt, down 0.81%.

Overnight, the most-traded SHFE lead 2606 contract opened at 16,675 yuan/mt. With domestic lead ingot inventory buildup and expectations for production cuts on the supply side, the tug-of-war between bulls and bears on SHFE lead intensified. SHFE lead moved sideways within 16,630-16,660 yuan/mt for most of the session, ultimately closing at 16,665 yuan/mt, down 0.09%. Open interest stood at 70,493 lots, a decrease of 566 lots from the previous trading day.

On the macro front:

US President Trump ordered the sinking of any vessel laying mines in the Strait of Hormuz, claiming he had "completely blocked" the strait until Iran was willing to reach a deal. He said he had plenty of time and was "in no rush," but Iran was "on the clock." He wanted to reach a "permanent deal" with Iran and would not consider using nuclear weapons against it. The Lebanon-Israel ceasefire was extended by three weeks. Iran reportedly activated its capital's air defense system to intercept "hostile" targets. US Treasury yields rose intraday to a one-week high. The US dollar index accelerated its gains, hitting a nearly two-week high, while the offshore yuan briefly approached 6.84, again hitting a more than one-week low.

:

Yesterday in the lead spot market, SHFE lead continued in the doldrums. Suppliers held prices firm while making shipments, and quotations from the Jiangsu, Zhejiang, Shanghai region remained scarce. Primary lead smelter cargoes self-picked up from production site were quoted at slight premiums, with mainstream producing areas quoted at premiums of +0~+50 yuan/mt ex-works against SMM #1 lead, while a few regions were quoted at premiums of +120~+150 yuan/mt. Secondary lead side, smelters held back from selling at low prices, with fewer quotations. Secondary refined lead was quoted at parity with SMM #1 lead average price ex-works. Downstream enterprises made just-in-time procurement, with some purchasing on dips and others waiting for new monthly long-term contracts to begin. Spot order market transactions were moderate.

Inventory: As of April 23, LME lead inventory decreased by 1,725 mt from the previous day to 270,975 mt. SHFE lead ingot warrant inventory was 57,203 mt, an increase of 127 mt from the previous trading day. SMM lead ingot social inventory showed an upward trend.

Today's Lead Price Forecast:

Recently, the off-season trend in the lead-acid battery market intensified. Some downstream enterprises expanded production cuts, and enthusiasm for lead ingot procurement declined, leading to inventory buildup in lead ingot social warehouses. Meanwhile, secondary lead enterprises in regions such as Anhui and Jiangsu were generally in a state of production reduction or suspension, with newly added enterprises undergoing maintenance joining in, further tightening the regional supply of lead ingots. In addition, after spot premiums for lead ingots in Southeast Asia rose, spot market trading cooled notably, and in recent days, suppliers began to soften their premium quotes for low-grade lead ingots, with downward adjustments emerging. Overall, bullish and bearish factors coexisted in the market, compounded by a complex macro situation, and lead prices were expected to remain in the doldrums.

Data Source Disclaimer: Data other than public 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.