Market Attention on Lead Ingot Imports Remains High: June Data and July Forecast [SMM Data]

According to customs data, in June 2024, refined lead exports were 1,362 mt, down 46.44% MoM and down 90.94% YoY. In H1, the total exports of refined lead and lead materials were 26,752 mt, down 67.39% YoY. In June 2024, refined lead imports were 525 mt, and lead alloy imports were 6,610 mt. In H1, the total imports of refined lead and lead materials were 29,755 mt, up 22.06% YoY.

In June, the domestic lead raw material supply conflict intensified again, leading to reduced production at lead ingot. Meanwhile, speculative capital surged, significantly increasing the open interest of the weighted SHFE lead contract which reached a historical high of 215,000 lots within the month. During this period, the most-traded SHFE lead contract peaked at 19,560 yuan/mt, hitting the highest level since July 10, 2018. At the same time, overseas lead ingot inventories increased for 10 consecutive trading days, with a cumulative increase of 46,500 mt, causing LME lead prices to plummet to a low of $2,128.5/mt, widening the SHFE/LME price ratio and opening the window for lead ingot imports into the Chinese market. In late June, as speculative capital quickly withdrew, the total open interest of the weighted SHFE lead contract decreased, and SHFE lead showed a trend of rising first and then falling.

Since July, the profit of lead ingot imports has ranged between 100-700 yuan/mt. According to an SMM survey, it is conservatively estimated that lead ingot imports in July will be between 10,000-20,000 mt.