Futures:
Overnight, LME lead opened at $1,972/mt. Amid relatively eased Middle East tensions and the fermentation of an ex-China lead smelter accident, LME lead fluctuated upward throughout the day, reaching an intraday high of $1,989/mt, a new high since late February this year. During the night session, however, LME lead lacked upward momentum and gave back some gains, ultimately closing at $1,973/mt, up 0.03%.
Overnight, the most-traded SHFE lead 2606 contract opened at 16,970 yuan/mt. As China's lead ingot inventory continued to accumulate and the spread between futures and spot prices widened, SHFE lead pulled back quickly after the opening. For most of the latter half of the session, it consolidated between 16,850-16,880 yuan/mt, ultimately closing at 16,840 yuan/mt, down 0.18%. Open interest stood at 65,481 lots, a decrease of 5,756 lots from the previous trading day.
On the macro front:
Chinese Foreign Minister Wang Yi held talks with his Iranian counterpart. China stated that a comprehensive ceasefire is urgently needed, resuming hostilities is even more inadvisable, and persisting with negotiations is particularly important. Iran stated that the Strait of Hormuz opening issue can be resolved as soon as possible. US President Trump said a US-Iran deal is "very likely" and threatened stronger bombing if talks fail. US media reported that the US and Iran are close to reaching a memorandum to first cease hostilities and then set a 30-day negotiation period, with key terms of nuclear talks showing flexibility. Iranian media said US media reports are inaccurate, Iran is still reviewing the US proposal, and Iranian senior officials said "progress in peace talks" is merely a US wish list.
:
In the lead spot market yesterday, on the first day back from the Labour Day holiday, SHFE lead rose sharply. Combined with increased lead ingot arrivals in Jiangsu, Zhejiang, Shanghai, suppliers shipped out following the market, and quoted premiums were slightly lower than before the holiday. Meanwhile, cargoes self-picked up from primary lead smelters increased compared to before the holiday, with mainstream production areas quoted at premiums of -30~+50 yuan/mt against SMM #1 lead average price on an ex-works basis, while a few regions quoted premiums above 100 yuan/mt. Secondary lead side, maintenance at mainstream production area smelters continued, with few market quotations and widening price divergence. Secondary refined lead was quoted at premiums of -75~0 yuan/mt against SMM #1 lead average price on an ex-works basis. After the holiday, downstream enterprises basically resumed operations and gradually purchased as needed. However, given the large lead price increase, most enterprises adopted a wait-and-see approach or purchased under long-term contracts. Some traders purchased following the market, mainly sourcing cargoes at small discounts, and the spot market trading atmosphere improved.
Inventory: As of May 6, LME lead inventory stood at 266,400 mt, a decrease of 2,100 mt from the previous trading day. SHFE lead ingot warrant inventory totaled 55,529 mt, an increase of 173 mt from the previous trading day. SMM lead ingot social inventory showed an upward trend compared to before the holiday.
Today's Lead Price Forecast:
With the market resuming normal trading after the Labour Day holiday, lead ingot arrivals increased at warehouses in multiple regions, and social inventory accumulated as expected. Recently, primary lead smelters in southwest and east China resumed production, leading to a relative increase in supply. Additionally, as the delivery of the SHFE lead 2605 contract was put on the agenda, inventory in warehouses around east China increased notably. However, secondary lead smelters in east China are currently undergoing concentrated maintenance, resulting in persisting regional tightness in lead ingot supply. Moreover, with downstream enterprises resuming production after the holiday, the subsequent trend of lead ingot inventory buildup may relatively slow down. With bullish and bearish factors coexisting, lead prices are expected to fluctuate at highs.
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.
![Multiple Positive Factors Outside China Overlapped, LME Lead Rose to a 2-Month High [SMM Lead Morning Brief]](https://imgqn.smm.cn/usercenter/yqTpQ20251217171721.jpeg)
