Lead prices fell. Attention should still be paid to the cost support of secondary refined lead in the future. [SMM Morning Lead Meeting Summary]

Futures Market:

Overnight, LME lead opened at $1,967/mt, and traded in the doldrums during the Asian session. Entering the European session, it fluctuated upward, hitting a high of $1,985/mt before the close, and eventually closed at $1,981/mt, up $17/mt or 0.87%.

On Friday evening, SHFE lead opened at 16,700 yuan/mt, and weakened after the opening, dipping to 16,540 yuan/mt, down 135 yuan/mt or 0.81%.

On the macro front, US manufacturing activity contracted for the fourth consecutive month in May. Affected by factors such as the weakening US dollar, escalating geopolitical conflicts, and the US's fluctuating tariff policies, investors' demand for safe-haven assets increased, leading to a significant rise in gold, silver, and crude oil prices on the evening of June 2. Powell: The government must understand the impact of potentially sharp fluctuations in the US dollar.

》Click to view historical SMM lead spot quotes

Spot Market Fundamentals:

Before the holiday, suppliers in the Shanghai market quoted Chihong and Honglu lead at premiums of -20 to 0 yuan/mt against the SHFE lead 2506/2507 contracts. In the early session, SHFE lead plummeted, and suppliers quoted cautiously, with some narrowing their discounts. There were fewer warrant quotes in Jiangsu, Zhejiang, and Shanghai. The discounts for cargoes self-picked up from primary lead smelters narrowed, with quotes ranging from a discount of 40 yuan/mt to a premium of 100 yuan/mt against the SMM 1# lead average price ex-factory. Secondary lead smelters were reluctant to sell at low prices, with some suspending quotes. Spot order quotes were at premiums of 50-100 yuan/mt against the SMM 1# lead price ex-factory, while a few traders quoted at discounts of 50-0 yuan/mt ex-factory. Downstream enterprises had a strong wait-and-see sentiment before the holiday, with some intending to purchase at lower prices, while others had no purchase plans due to the upcoming holiday or bearish outlook on the market, limiting the improvement in spot market transactions.

Inventory: As of May 30, LME lead inventory decreased by 2,375 mt to 286,175 mt. As of May 29, the total social inventory of lead ingots in five regions tracked by SMM reached 49,400 mt, down about 900 mt from May 22, but up 6,000 mt from May 26.

Today's Lead Price Forecast:

Before the holiday, suppliers were generally active in selling, but downstream procurement demand declined due to the upcoming holiday, and spot transactions were generally conducted at discounts. The absence of lead consumption during the traditional Dragon Boat Festival holiday has become the biggest bearish factor at present, and the risk of inventory buildup for lead ingots will further rise after the holiday. Although there are expectations of a rebound in secondary refined lead supply in June, the supply of scrap materials remains tight, making it difficult to lower scrap battery prices. The widening losses in secondary lead and the inverted pricing between secondary refined lead and primary lead have not eased. After the holiday, it is still necessary to monitor whether the cost support for secondary lead remains effective.

》Click to view the SMM Metal Industry Chain Database