Macro bullish factors + fundamental improvements: Lead prices break through key levels and enter an upward trend [SMM Morning Lead Meeting Summary]

Futures Market:

Overnight, LME lead opened at $2,018/mt, rising slightly during the Asian session. Entering the European session, it continued to fluctuate upward, hitting a high of $2,049/mt before falling below the intraday average line near the close, ultimately closing at $2,031.5/mt, up $19.5/mt or 0.97%.

Overnight, the most-traded SHFE lead 2508 contract opened at 17,170 yuan/mt, rising to hit a high of 17,240 yuan/mt in early trading before consolidating. After briefly falling below 17,200 yuan/mt, it rebounded slightly to near the intraday average line, ultimately closing at 17,210 yuan/mt, up 105 yuan/mt or 0.61%.

On the macro front, Trump expressed that he was "very confident" that the military conflict between Israel and Iran had ended. However, the conflict between Israel and Iran could reignite, perhaps soon. He did not believe Iran would resume its nuclear program. Russia stated that it was willing to support another production increase at the next OPEC+ meeting if OPEC+ deemed it necessary. If approved by the government, the Russian oil industry was ready to increase production again in August.

》Click to view SMM historical spot lead quotations

Spot Market Fundamentals:

In the Shanghai market, Chihong and Honglu lead were quoted at discounts of 50-10 yuan/mt against the SHFE lead 2507/2508 contracts. In the Jiangsu-Zhejiang market, Jijin and JCC lead were quoted at discounts of 30-20 yuan/mt against the SHFE lead 2507/2508 contracts. SHFE lead rose strongly, crossing the 17,000 yuan/mt threshold again after nearly three months. Suppliers actively quoted prices to sell, with some discounts further widening. Discounts for cargoes self-picked up from primary lead smelters also widened, quoted at discounts of 80 yuan/mt to premiums of 100 yuan/mt against SMM 1# lead ex-works. Secondary lead smelters' selling enthusiasm increased, with mainstream secondary refined lead quotations at discounts of 50-0 yuan/mt against SMM 1# lead ex-works, with a few still quoted at discounts of 25-75 yuan/mt in some regions. As lead prices rose, downstream enterprises' pessimistic sentiment about the future market eased, with inquiries relatively increasing. Meanwhile, large enterprises were closing their books and taking inventory at mid-year, adopting a wait-and-see attitude and reducing purchases. Spot market transactions were generally average.

According to SMM, as of June 23, the total social inventory of lead ingots in five regions tracked by SMM reached 55,700 mt, down about 700 mt from June 16 and over 300 mt from June 19. As of June 25, LME inventory decreased by 2,125 mt to 275,250 mt, with the decline mainly coming from Singapore warehouses. Today's Lead Price Forecast:

Today's Lead Price Forecast:

The macro sentiment has improved, creating an overall strong operating atmosphere for non-ferrous metals. Coupled with a shift in the lead market's fundamentals due to short-term supply reductions, continuous destocking of LME inventory, and a strong bullish sentiment in futures lead, SHFE lead broke through the key 17,000 yuan/mt level this week after increased trading volume and entered an upward channel. Meanwhile, downstream consumption is in the transition period between the off-season and peak season, and some enterprises plan to raise the prices of battery products to pass on the pressure of rising lead prices. In the short term, lead prices may continue to hold up well.

》Click to view the SMM Metal Industry Chain Database