Lead prices stabilize and consolidate, with limited rebound drivers for now [Institution's comment]

On Wednesday, the most-traded SHFE lead PB2507 contract fluctuated rangebound during the daytime session, while it rose first and then fell during the night session. LME lead prices fluctuated rangebound. Spot market: In the Shanghai market, Chihong and Honglu lead were quoted at 16,530-16,550 yuan/mt, with discounts of 20-0 yuan/mt against the SHFE lead 2506/2507 contracts. Suppliers shipped goods according to market conditions, with some offering quotes at small discounts. The cargoes self-picked up from production sites of primary lead smelters in major producing areas were quoted at discounts of 60 yuan/mt to premiums of 100 yuan/mt against the SMM 1# lead average price. Discounts further widened in South China, while narrowing in North China. Spot orders of secondary lead were quoted at premiums of 0-100 yuan/mt against the SMM 1# lead price, with a few traders offering quotes at discounts of 50-0 yuan/mt. After the holiday, downstream enterprises had limited immediate demand, and some reduced their inquiries after buying the dip. SMM: Recently, a large secondary lead smelter in east China resumed production. However, due to ongoing environmental protection inspections in the region, the smelter's production remains unstable.

Overall, the continuity of downstream purchases after the holiday was weak, and there was no significant improvement in off-season demand. In June, maintenance at primary lead smelters increased, while some secondary lead smelters resumed production, leading to a marginal increase in supply pressure. The support near 16,500 yuan/mt for lead prices remains effective, but the driving force for a rebound is temporarily insufficient, with prices expected to maintain a fluctuating and consolidating trend in the short term.