The fundamental aspects of the lead market improved in late June, and lead prices continued to fluctuate at highs [SMM Morning Lead Meeting Summary]

Futures Market:

On Friday evening, LME lead opened at $1,991.5/mt. During the Asian session, it fluctuated downward. Entering the European session, it continued to decline, hitting a bottom of $1,978/mt before fluctuating upward, reaching a high of $1,995.5/mt, and finally closing at $1,995/mt, up $6.5/mt or 0.33%.

On Friday evening, the most-traded SHFE lead 2507 contract gapped up and opened at 16,855 yuan/mt. In the early session, it consolidated horizontally around the daily moving average before rising to a high of 16,885 yuan/mt and eventually closing at 16,875 yuan/mt, up 20 yuan/mt or 0.12%.

Macro Aspects: US President Trump stated on the evening of June 21 local time that the US military had "successfully struck" and "completely eliminated" three Iranian nuclear facilities. According to a report by Fox News on the 21st, the US military dropped six bunker-buster bombs on the Fordow nuclear facility and launched 30 Tomahawk missiles at other Iranian nuclear facilities. According to a previous announcement by the US Department of Commerce, tariffs will be imposed on various steel household appliances starting from June 23, including "steel derivatives" such as dishwashers, washing machines, and refrigerators.

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Spot Fundamentals:

In the Shanghai market, Chihong and Honglu lead were quoted at discounts of 50-0 yuan/mt against the SHFE lead 2507 contract. In the Jiangsu and Zhejiang markets, JCC lead was quoted at parity against the SHFE lead 2507 contract. As SHFE lead fluctuated and pulled back, suppliers refused to budge on prices when selling, with discounts remaining unchanged from yesterday. Additionally, the price quotes for cargoes self-picked up from primary lead smelters diverged, with traders mostly offering large discounts. Mainstream production areas quoted discounts of 200-100 yuan/mt against the SHFE lead 2507 contract ex-factory, while smelters were reluctant to sell at low prices, with selling enthusiasm declining. Quotes ranged from discounts of 30 yuan/mt to premiums of 75 yuan/mt against the SMM 1# lead average price ex-factory. Secondary refined lead enterprises also had limited quotations, with secondary refined lead in some regions quoted at discounts of 50 yuan/mt to premiums of 25 yuan/mt against the SMM 1# lead average price ex-factory. Downstream enterprises maintained purchasing as needed. With lead prices falling, wait-and-see sentiment rose. Some enterprises focused on long-term contract purchases, and trading activity in the spot market declined.

Inventory: As of June 20, LME lead inventory decreased by 3,550 mt to 284,075 mt. As of June 19, the total social inventory of SMM lead ingots in five regions reached 56,000 mt, an increase of 1,300 mt from June 12 and a decrease of over 300 mt from June 16.

Today's Lead Price Forecast:

The escalation of the Israel-Iran conflict in macro aspects has increased its impact on the global energy market, indirectly disturbing non-ferrous metals. In late June, maintenance activities at primary lead enterprises increased, and domestic lead concentrate TCs fell again. Raw material supply constraints limited refined lead production, easing the supply pressure of lead ingots. As the mid-year approaches, some lead-acid battery enterprises have postponed their raw material procurement needs due to the requirement for mid-year account closing and settlement. Additionally, some downstream enterprises are cautiously bearish about the lead price, which is fluctuating at highs, leading to a slight decline in their enthusiasm for procurement and inventory preparation. In the short term, both supply and demand in the lead market are weak. Some downstream enterprises still have expectations for production resumption in July, and the lead price may continue to fluctuate at highs in the short term.

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