Summary of SMM Lead Morning Meeting on July 21, 2023

Futures trading:

Overnight, LME Lead opened at $2093 per ton. Driven by the strength of SHFR Lead, LME Lead also showed a fluctuating upward trend, basically repairing the previous day's decline, reaching a maximum of $2118.5 per ton at night, and finally closing at $2116.5 per ton in the end of the day, an increase of 1.1%.

Overnight, the main lead contract 2308 of Shanghai Futures Exchange was opened at 15825 yuan/ton. Yesterday, the inventory of lead ingots on the Shanghai Futures Exchange decreased by over a thousand tons, boosting the strength of Shanghai Futures Exchange. During this period, the highest price was 15870 yuan/ton, and it once again hit a new 6-month high. At night, the SHFE lead market showed a fluctuating upward trend, ultimately closing at 15855 yuan/ton, an increase of 0.44%, and recording four consecutive positive periods; Its position reached 73.301 million hands, a decrease of 950 hands compared to the previous trading day.

Today's lead price forecast:

On the macro level, the National Development and Reform Commission will launch several measures to promote the development of the private economy in the near future, and formulate and issue policy documents to promote private investment. The US unemployment figures strengthened the prospect of interest rate increase by the Federal Reserve, the US bond yield rose by more than 10 basis points in the session, and the U.S. Dollar Index rose to a weekly high for three consecutive times. Former Federal Reserve Chairman Bernanke: The Federal Reserve is expected to raise interest rates in July, which may be the last of this round.

In terms of fundamentals, yesterday, the inventory of lead ingots in the warehouse receipts of the Shanghai Futures Exchange decreased by over a thousand tons, which to some extent fulfilled consumer expectations and helped lead prices continue to strengthen. At the same time, by the end of July, lead smelting enterprises had mostly delivered long orders in July, and the market circulation of goods was limited, which prompted the spot to maintain a premium quotation. In the aspect of regenerated lead, due to the tight rise of waste materials, the quotation refinery was able to deliver at a fixed price, while the supply of goods in the trade market was fair, the warehouse receipt quotation discount began to expand, and the Spot market was divided into two levels of delivery and investment. Later, we continued to pay attention to the price guidance of downstream enterprises' procurement trends, And the follow-up level of actual consumption of lead battery terminals. In the short term, lead prices will maintain a strong and volatile trend.