There may still be room for an increase in social inventory of lead ingots. Next week, focus on the production situation at the smelting end. [SMM Morning Lead Meeting Summary]

Futures Market:

Overnight, LME lead opened lower with a gap at $1,988.5/mt. After touching a low of $1,983/mt in the Asian session, it fluctuated upward. Entering the European session, it reached a high of $1,999.5/mt before pulling back slightly at the end of the day, closing at $1,992/mt, down 0.08%.

Overnight, the most-traded SHFE lead 2507 contract opened higher with a gap at 16,990 yuan/mt. After touching a low of 16,890 yuan/mt at the beginning of the session, it fluctuated upward, reaching a high of 16,950 yuan/mt, and closed at 16,925 yuan/mt, up 0.15%.

》Click to view historical SMM lead spot quotes

Macro Aspects:

Trump indicated that car tariffs may be raised in the near future. He also lashed out at Powell, urging a 200 basis point interest rate cut. Trump claimed that the US and China had reached an agreement, to which Chinese Foreign Ministry spokesperson Lin Jian responded during a regular press conference on the 12th. China's MIIT: Supports automakers' commitment to a "60-day payment term" to promote the healthy development of the industry.

Spot Market Fundamentals:

SHFE lead prices fluctuated upward. Suppliers quoted prices in line with the market and maintained discounted quotes. Electrolytic lead smelters, however, quoted relatively firm prices, continuing to offer premiums of 50-100 yuan/mt against the SMM 1# lead average price for ex-factory delivery. Secondary lead smelters showed slightly better enthusiasm for shipping, with more quotes than the previous day. Secondary refined lead was quoted at discounts of 50 yuan/mt to premiums of 50 yuan/mt against the SMM 1# lead average price for ex-factory delivery. Downstream enterprises maintained just-in-time procurement, preferring electrolytic lead smelters as their supply source. Regional differences in spot market transactions still existed.

Inventory: On June 12, LME lead inventory decreased by 4,775 mt to 268,750 mt. As of June 12, the total social inventory of lead ingots in five locations tracked by SMM reached 54,700 mt, an increase of approximately 800 mt from June 5 and an increase of 1,300 mt from June 9.

》Click to view the SMM Metal Industry Chain Database

Today's Lead Price Forecast:

This week, the production of primary lead smelters has steadily increased, while secondary lead enterprises are generally in a state of production reduction or suspension due to factors such as environmental protection, losses, and insufficient scrap supply, leading to a regional tightening of lead ingot supply. Due to the limited number of secondary lead enterprises shipping and their firm pricing, lead consumption has shifted towards the primary lead market. However, as the lead consumption market is still in the off-season, the improvement in spot lead market transactions has been limited. Next week, the front-month SHFE lead contract will enter delivery. The expectation of suppliers transferring inventory to delivery warehouses before delivery may still allow for an increase in social inventory of lead ingots. In addition, we need to continue to monitor the impact of environmental protection inspections, scrap battery supply, and other factors on the production of secondary lead enterprises, as well as the impact of maintenance at electrolytic lead smelters producing delivery brands in mid-month on the trend of lead prices.