Macro positive factors nearly exhausted, domestic social inventory accumulation dragging lead prices in the doldrums [SMM Morning Lead Meeting Summary]

Futures Market:

Overnight, LME lead opened at $1,994/mt. During the Asian session, it dipped to a low of $1,977/mt before fluctuating upward to a high of $2,005/mt. It eventually closed at $2,004.5/mt, up by $12/mt or 0.60%.
Overnight, the most-traded SHFE lead contract opened at 16,990 yuan/mt. It dipped to a low of 16,920 yuan/mt in the early session before fluctuating upward to a high of 16,995 yuan/mt. It eventually closed at 16,990 yuan/mt, down by 10 yuan/mt or 0.06%.

On the macro front, the US dollar slipped after a series of economic data was released in the US on Thursday. Recent remarks by the US Fed indicated that more data was needed to determine the impact of tariff announcements on prices and the economy before adjusting policies.

》Click to view SMM historical spot lead quotations

Spot Market Fundamentals:

In the Shanghai market, Chihong lead was quoted at premiums of -30 to 0 yuan/mt against the SHFE lead 2506 contract or at parity against the SHFE lead 2505 contract. Honglu lead was quoted at parity against the 2506 contract. JCC lead in Jiangsu and Zhejiang was quoted at premiums of -20 to 0 yuan/mt against the 2506 contract. SHFE lead held up well and broke through the 17,000 yuan/mt threshold. As today is the delivery day for the SHFE lead 2505 contract, some suppliers prioritized delivery matters, resulting in a slight narrowing of the discounts in quotations compared to yesterday. Meanwhile, primary lead smelters continued to offer cargoes self-picked up from production sites at significant discounts. Main producing regions quoted cargoes self-picked up from production sites at premiums of -200 to -80 yuan/mt against the SHFE lead 2506 contract ex-factory. In the secondary lead sector, smelters increased their quotations. Secondary refined lead was quoted at premiums of -100 to 0 yuan/mt against the SMM 1# lead average price. Downstream enterprises had limited immediate demand and were cautious about purchasing lead at high prices, leading to a noticeable slowdown in spot market transactions.

Inventory: As of May 15, LME lead inventory increased by 400 mt to 250,675 mt. According to SMM, as of May 15, the total social inventory of lead ingots across five locations tracked by SMM reached 56,000 mt, up by 8,500 mt from May 8 and by 8,900 mt from May 12.

Today's Lead Price Forecast:

On the fundamentals side, the lead-acid battery market is in its traditional off-season in May. Battery inventory accumulated during the Labour Day holiday is difficult to digest quickly, resulting in limited demand for raw lead ingots. As the SHFE lead delivery approaches, suppliers are transferring inventory to delivery warehouses, leading to a simultaneous increase in social warehouse inventory of lead ingots. Additionally, as lead prices rebound, the profitability of secondary lead has improved, prompting some enterprises to plan production resumptions. The expected increase in supply poses a risk of further inventory buildup in social warehouses of lead ingots.

》Click to view SMM Metal Industry Chain Database