Suppliers of lead ingots are in poor sentiment for shipping, and downstream buyers are generally in a wait-and-see mood for purchasing [SMM Morning Lead Meeting Summary]

Futures Market:

Overnight, LME lead opened at $1,989/mt. During the Asian session, it fluctuated upward, reaching a high of $1,995/mt in the European session before pulling back under pressure from the rising US dollar. It hit a low of $1,976.5/mt in the tail end of trading and closed at $1,987.5/mt, down 0.03%.

Overnight, the most-traded SHFE lead 2507 contract opened lower with a gap at RMB 16,850/mt. It briefly touched a low of RMB 16,805/mt at the start of trading, oscillating around RMB 16,830/mt during the session, with a high of RMB 16,860/mt. It closed at RMB 16,815/mt, down 0.24%.

》Click to view historical SMM lead spot price quotations

Macro Aspects:

On tariffs, sources revealed that India and the US are expected to reach a provisional trade agreement before month-end, while the US and Mexico are close to finalizing an agreement on steel import tariffs. UK employment fell by the most since 2020 in May, with traders fully pricing in two more interest rate cuts by the Bank of England this year. The first meeting of the China-US Economic and Trade Consultation Mechanism entered its second day. The meeting began in the morning and continued after lunch. Several automakers, including BYD, GAC, and Dongfeng, pledged to unify their payment terms to within 60 days.

Spot Market Fundamentals:

SHFE lead maintained a fluctuating trend. There was limited availability of cargoes in the Jiangsu, Zhejiang, and Shanghai markets, with discounted quotations remaining stable compared to the previous day. In some regions, there were no discounted quotations for cargoes self-picked up from primary lead smelters. Main producing areas quoted premiums of RMB 0-125/mt against the SMM 1# lead average price for primary lead. Secondary lead smelters generally reduced or halted production, either suspending quotations or offering secondary refined lead at parity against the SMM 1# lead average price ex-factory. Following the rise in lead prices, downstream enterprises adopted a wait-and-see attitude, with fewer inquiries and sluggish spot order transactions.

Inventory: On June 10, LME lead inventory decreased by 1,950 mt to 278,025 mt. As of June 9, the total social inventory of lead ingots across five locations tracked by SMM reached 53,900 mt, up 4,500 mt from May 29 and 4,000 mt from June 3.

》Click to view the SMM Metal Industry Chain Database

Today's Lead Price Forecast:

As the delivery date approaches, quotations for cargoes self-picked up from primary lead smelters remain firm, with few sellers offering discounts. For secondary lead, due to ongoing tight raw material supply, continued loss pressures, and difficulties in selling premium cargoes, smelters have low willingness to sell. Mainstream secondary refined lead is quoted at parity against the SMM 1# lead average price ex-factory, with a few transactions of refined lead at a discount of RMB 100/mt in some regions. On the consumption side, some downstream enterprises are restocking based on immediate needs, and their willingness to purchase has improved due to fears of further price increases. However, most downstream enterprises maintain a strong wait-and-see sentiment. Overall, lead prices are expected to maintain a fluctuating trend.