Bullish and bearish forces intertwined, lead prices fluctuated rangebound [SMM Lead Morning News]

SMM May 19:

On Friday, LME lead opened at $2,000/mt. During the Asian session, it fluctuated downward, reaching a low of $1,982.5/mt. As the US dollar index was in the doldrums, LME lead rebounded and made up for lost ground during the European session, hitting a high of $2,007/mt at the close, and eventually closed at $2,006/mt, up 0.07%.

On Friday evening, the most-traded SHFE lead 2506 contract opened at 16,885 yuan/mt. It briefly touched a low of 16,865 yuan/mt at the beginning of the session. Boosted by the rise in LME lead, it climbed to a high of 16,955 yuan/mt. With long and short positions intertwined, SHFE lead gave back some of its gains at the close, ending at 16,915 yuan/mt, down 0.09%.

On the consumption side, production at lead-acid battery enterprises remained relatively unchanged, with most enterprises focusing on purchases under long-term contracts. The current off-season trend in the lead-acid battery market persisted, remaining the biggest bearish factor. On the primary lead side, production at enterprises was relatively stable. Due to the SHFE lead delivery factors last week, in-plant inventory had been reduced (including simple transfers). Suppliers had no intention of further expanding spot discounts for sales, and the level of spot discounts was expected to remain stable. On the secondary lead side, as lead prices rebounded, losses in secondary lead production slightly narrowed, with some enterprises expressing interest in resuming operations. Coupled with the commissioning of new capacity, the extent of spot discounts for secondary refined lead may expand again. Overall, lead ingot supply is expected to increase this week, which may exacerbate inventory buildup. It is expected that lead prices will encounter resistance and maintain sideways movement.