Next week, macroeconomic data will mainly include China's official manufacturing PMI for June, the US's ADP employment figure for June, the US's unemployment rate for June, and the US's seasonally adjusted non-farm payrolls for June. This week, influenced by multiple factors such as US President Trump considering an early nomination for the next Fed Chairman, the US dollar index fell below the 97 mark during trading, the first time since March 2022. Additionally, next week coincides with the anniversary of the establishment of the Hong Kong Special Administrative Region and US Independence Day, with the Hong Kong Stock Exchange, the New York Stock Exchange, and the Chicago Mercantile Exchange each closing for one day.
For LME lead, boosted by the decline in the US dollar index, non-ferrous metals generally strengthened. Meanwhile, LME lead inventory fell by over 10,000 mt week-on-week, and the LME lead cash-3M contango narrowed compared to last week, reaching -$21.4/mt, driving LME lead to surge to a nearly three-month high and sparking market speculation of a "squeeze". However, with the current high base of overseas lead ingot inventory, the boost to lead prices is limited, and it may maintain a high consolidation status in the short term. It is expected that next week, LME lead will trade within the range of $1,990-$2,050/mt.
For domestic SHFE lead, entering July next week, downstream enterprises will have resolved the year-end accounting and inventory checks, and the spot market may resume regular trading. With the rise in lead prices, losses for secondary lead have narrowed. Coupled with the conclusion of environmental protection inspections in various regions, secondary lead enterprises' willingness to resume production has increased. The expected increase in supply may pose a risk of lead prices jumping initially and then pulling back. It is expected that next week, the most-traded SHFE lead contract will trade within the range of 16,800-17,250 yuan/mt.
Spot price forecast: 16,700-17,000 yuan/mt. On the demand side, the impact of the traditional off-season in the lead-acid battery market has not yet been lifted. Facing rising lead prices, downstream enterprises are cautious in procurement, with most relying on long-term contracts for purchases. On the supply side, production at primary and secondary lead enterprises is gradually resuming, increasing the availability of spot market supplies. During this period, due to the widening spread between futures and spot prices, some delivery brands intend to transfer to delivery warehouse, while more enterprises prefer spot trading. It is expected that spot transactions will likely maintain a contango status.
