Lead prices continue to hold up well, with losses of secondary refined lead slowly recovering [SMM Lead Morning Meeting Summary]

Futures Market:

Overnight, LME lead opened at US$2,032/mt, fluctuating upward during the Asian session. Entering the European session, it reached a high of US$2,049.5/mt before facing pressure from the intraday average line, oscillating weakly. It eventually closed at US$2,038.5/mt, up US$7/mt, or 0.34%. Overnight, the most-traded SHFE lead 2508 contract opened at RMB 17,225/mt, fluctuating upward before facing pressure. After reaching a high of RMB 17,270/mt, it consolidated slightly, eventually closing at RMB 17,250/mt, up RMB 45/mt, or 0.26%.

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Spot 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. Despite the strength of SHFE lead, suppliers maintained discounts for shipments. Meanwhile, secondary lead enterprises increased their shipping enthusiasm, with secondary refined lead quoted at discounts of 70-0 yuan/mt against the SMM 1# lead average price for factory delivery. However, downstream enterprises were cautious about high prices and reduced procurement, with only partial just-in-time procurement, especially as large enterprises closed their accounts and inventoried, with long-term contracts dominating procurement and spot order market transactions remaining sluggish.

According to SMM, as of June 26, the total social inventory of lead ingots in five regions tracked by SMM reached 56,000 mt, unchanged from June 19 and up by over 300 mt from June 23. As of June 24, LME inventory decreased by 2,000 mt to 273,250 mt, with the decline mainly coming from Singapore warehouses.

Today's Lead Price Forecast:

This week, lead prices have shown a fluctuating upward trend, with the most-traded SHFE lead contract reaching a three-month high amid a bullish sentiment. Both suppliers and smelters have been actively quoting and shipping. On the fundamentals side, many primary lead smelting enterprises have undergone maintenance this week, while secondary lead enterprises have gradually recovered from losses, showing increased willingness to resume production. However, the total production recovery of secondary refined lead in June may still fall short of early-month expectations. On the consumption side, except for the postponement of spot order procurement needs during the year-end account closing and inventorying period for some large downstream enterprises, the procurement sentiment of other small and medium-sized enterprises has relatively improved, with a greater preference for cargoes self-picked up from production sites. Subsequent attention should be paid to the resumption dynamics of secondary lead enterprises, as well as the suppliers' intention to transfer to delivery warehouses and changes in social inventory after the expansion of the spread between futures and spot prices.

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