US dollar weakening coupled with reduced refined lead supply, lead prices continue to hold up well [SMM Lead Morning Meeting Summary]

Futures Market:

Overnight, LME lead opened at US$2,003.5/mt. During the Asian session, it consolidated sideways around the intraday average. Entering the European session, it fluctuated upward, reaching a high of US$2,029/mt, and eventually closed at US$2,012/mt, up US$5/mt or 0.25%.

Overnight, the most-traded SHFE lead 2507 contract opened at 17,000 yuan/mt. After initially rising to a high of 17,130 yuan/mt, it consolidated sideways around the intraday average for a short period and eventually closed at 17,085 yuan/mt, up 155 yuan/mt or 0.92%.

In an open letter to the Iranian people, Iranian President Masoud Pezeshkian stated that after the heroic resistance of the Iranian people, the 12-day war initiated by Israel had come to an end. The ceasefire news triggered a rebound in market risks and a weakening of the US dollar. On the evening of June 24 (Beijing time), Fed Chairman Powell stated during a hearing that the Atlanta Fed's GDP model did not indicate a US economic recession. Inflation may not be as strong as expected, and if the US labour market weakens, it may imply an earlier interest rate cut by the Fed. The vast majority of policymakers believe that an interest rate cut later this year is appropriate, and Powell refused to comment on Trump's tariff policy.

》Click to view historical SMM lead spot quotes

Spot Market Fundamentals:

In the Shanghai market, Chihong and Honglu lead were quoted at a discount of 50-0 yuan/mt against the SHFE lead 2507/2508 contracts. In the Jiangsu-Zhejiang market, Jijin and JCC lead were quoted at a discount of 30-20 yuan/mt against the SHFE lead 2507/2508 contracts. SHFE lead held up well, and suppliers quoted prices accordingly, generally offering at a discount. Additionally, the discount for cargoes self-picked up from electrolytic lead smelters increased, with mainstream production sites quoting at a discount of 50 yuan/mt to a premium of 50 yuan/mt against the SMM 1# lead average price. Meanwhile, secondary lead smelters increased their quotations compared to yesterday, with discounts expanding. Secondary refined lead was quoted at a discount of 100-0 yuan/mt against the SMM 1# lead average price. Lead prices fluctuated upward, while consumption in the lead-acid battery market was average. Downstream enterprises adopted a wait-and-see attitude and were cautious in purchasing. Additionally, as it approached mid-year, a small number of enterprises were involved in account closing and inventory checks, resulting in relatively sluggish spot order transactions.

According to SMM, as of June 23, the total social inventory of lead ingots in five regions tracked by SMM reached 55,700 mt, a decrease of approximately 700 mt from June 16 and a decrease of over 300 mt from June 19. As of June 24, LME inventory decreased by 3,650 mt to 277,375 mt, with the decrease mainly coming from Singapore warehouses.

Today's Lead Price Forecast:

Recently, the tight supply trend of lead concentrates and scrap battery raw materials has persisted, with the lead import window closed. Routine maintenance at primary lead smelters in June and the potential for slower-than-expected recovery of secondary refined lead have led to a decline in domestic refined lead supply. Although downstream operations have remained generally stable, it is still early for peak-season inventory building, and the enthusiasm for purchasing is moderate. Social inventory of refined lead continues to follow a destocking trend. The fundamentals of the lead market improved slightly in late June compared to the previous period. A short-term decline in supply has provided strong support for lead prices, which may continue to hold up well.

》Click to view the SMM Metal Industry Chain Database