Macro bullish factors continue to ferment, and lead prices may continue to hold up well in the short term [SMM Morning Lead Meeting Summary]

Futures Market:

Overnight, LME lead opened at $1,991.5/mt. During the Asian session, it fluctuated downward. Entering the European session, it hit a low of $1,975/mt before rebounding and eventually closing at $1,992.5/mt, down $0.5/mt or 0.03%.

Overnight, the most-traded SHFE lead contract opened at 16,990 yuan/mt. It rose to a high of 17,050 yuan/mt in the early session, weakened slightly, and then consolidated horizontally under the pressure of the intraday moving average. It finally closed at 17,025 yuan/mt, up 105 yuan/mt or 0.62%.

Macro Aspects: US CPI data has been lower than expected for three consecutive months, and the inflationary pressure caused by tariffs has yet to emerge. With the US dollar in the doldrums and the easing of trade conflicts, market risk appetite has increased, leading to a bullish sentiment in non-ferrous metals. In this environment, lead futures have slightly rebounded.

》Click to view SMM historical spot lead quotations

Spot Fundamentals:

In the Shanghai market, Chihong lead was quoted at discounts of 30-0 yuan/mt against the SHFE lead 2506 contract or at parity against the SHFE lead 2505 contract. Honglu lead was quoted at discounts of 30-20 yuan/mt against the SHFE lead 2506 contract. JCC and Jinde lead in the Jiangsu-Zhejiang region were quoted at discounts of 30-0 yuan/mt against the 2506 contract. SHFE lead maintained a bullish oscillation. Suppliers were actively selling, and the discount quotations increased. Meanwhile, the cargoes self-picked up from production sites of primary lead smelters were quoted at further expanded discounts against SHFE lead, with a few quotations approaching discounts of 200 yuan/mt. The available supply of secondary refined lead was limited, and quotations were at discounts of 50-0 yuan/mt against the SMM #1 lead price, with a few premium quotations still existing. Downstream enterprises had a strong wait-and-see sentiment and made fewer inquiries, resulting in sluggish transactions in the spot order market.

Inventory: As of May 14, LME lead inventory decreased by 2,900 mt to 250,275 mt. According to SMM, as of May 12, the total social inventory of lead ingots in five regions tracked by SMM reached 47,100 mt, an increase of 1,200 mt from May 6 and a decrease of over 400 mt from May 8.

Today's Lead Price Forecast:

 On the fundamentals side, it is difficult for downstream consumption in the lead market to show outstanding performance. Although there are expectations for production cuts on the supply side, under the background of the off-season for battery consumption, both supply and demand in the lead market have declined, with obvious bottom support for lead prices. The macro bullish factors continue to ferment, and lead futures may still hold up well in this environment. This week, suppliers will still focus on spot cargo sales, with some suppliers expanding discounts to sell, but downstream enterprises are mostly waiting and watching. As lead prices strengthen, the losses of secondary refined lead have slightly recovered compared to before. It is still necessary to pay attention to the realization of expectations for production cuts in secondary refined lead. Lead prices may still maintain a bullish oscillation in the short term.

》Click to view SMM Metal Industry Chain Database