Futures Market:
Overnight, LME lead opened at $1,977.5/mt, fluctuating rangebound in the Asian session, with a low of $1,973.5/mt. Entering the European session, it rebounded from the low to reach a high of $1,993.5/mt, before fluctuating rangebound towards the close, eventually closing at $1,988/mt, up 0.71%.
Overnight, the most-traded SHFE lead 2507 contract opened higher with a gap at 16,815 yuan/mt, touching a low of 16,790 yuan/mt in early trading. It consolidated after a short covering rally due to bears reducing their positions, reaching a high of 16,905 yuan/mt during the session, and eventually closing at 16,865 yuan/mt, up 0.81%.
》Click to view historical spot quotes for SMM lead
Macro Aspects:
US Congressional Budget Office: It is estimated that measures to avoid hitting the debt ceiling will be exhausted between mid-August and the end of September. The US Senate plans to introduce a major adjustment to the Trump tax reform bill this week. On the afternoon of June 9 local time, the first meeting of the China-US economic and trade consultation mechanism was held in London, UK. According to Yuyuantantian, the first meeting of the China-US economic and trade consultation mechanism will continue on June 10 local time. National Bureau of Statistics (NBS): In May, the CPI decreased 0.2% MoM and 0.1% YoY; the PPI decreased 0.4% MoM and 3.3% YoY. General Administration of Customs of China: In the first five months of this year, China's import and export of goods trade increased 2.5% YoY. The US is China's third-largest trading partner, with the total trade value between China and the US decreasing 8.1% in the first five months.
SHFE lead continued to fluctuate, with suppliers shipping goods in line with market conditions. The discounts for some warrant cargoes widened compared to last Friday, while the discounts for cargoes self-picked up from production sites narrowed. The quotations for primary lead in major producing areas were at premiums of 0-125 yuan/mt against the SMM 1# lead average price. Additionally, production cuts increased at secondary lead smelters, leading to dispersed market quotations. Secondary refined lead was quoted on par with the SMM 1# lead average price ex-factory. Downstream enterprises only made just-in-time procurement with limited rigid demand, resulting in relatively sluggish spot order transactions.
Inventory: On June 9, LME lead inventory decreased by 1,300 mt to 279,975 mt. As of June 9, the total social inventory of SMM lead ingots in five locations reached 53,900 mt, an increase of 4,500 mt from May 29 and an increase of 4,000 mt from June 3.
》Click to view the SMM Metal Industry Chain Database
Today's Lead Price Forecast:
Recently, lead prices have shown a trend of rebounding from lows. Suppliers have been actively shipping goods, with secondary lead prices in some regions (especially Jiangsu and Zhejiang) forming an inversion with primary lead. Secondary refined lead was quoted at premiums of 50-100 yuan/mt against the SMM 1# lead average price ex-factory, prompting a small number of downstream enterprises to purchase on dips as needed, with a preference for primary lead delivery cargoes. As a result, social warehouse inventory has slightly decreased. In addition, environmental protection inspections were carried out in regions such as Inner Mongolia and Anhui last week, prompting some secondary lead enterprises to reduce or suspend production. The short-term reduction in supply will ease the pressure of inventory buildup of lead ingots, and lead prices may maintain a fluctuating trend.
