Downstream enterprises have limited demand, and trading in the spot market is sluggish [SMM Lead Morning Meeting Summary]

Futures Market:

Overnight, LME lead opened at $2,043/mt. During the Asian trading session, it fluctuated downward, reaching a low of $2,036/mt before rebounding slightly. Entering the European trading session, it surged to a high of $2,051.5/mt, only to pull back at the end of the day, closing at $2,039/mt, down 0.12%.

Overnight, the most-traded SHFE lead 2508 contract opened at 17,115 yuan/mt. It briefly touched a low of 17,110 yuan/mt at the start of the session. As short positions were reduced, SHFE lead fluctuated upward, reaching a high of 17,210 yuan/mt. It pulled back slightly at the end of the day, closing at 17,170 yuan/mt, up 0.2%.

》Click to view historical SMM lead spot quotes

Macro Aspects:

Foreign media: US officials are seeking to narrow the scope of trade agreements, aiming to reach a deal before July 9. India is reportedly seeking a provisional trade agreement with the US this week. US Treasury Secretary Bessent said that a trade agreement with India is "very close." Fed Chairman Powell stated that he cannot say whether an interest rate cut in July would be premature, and that no meeting can be ruled out. Trump threatened to have DOGE review subsidies received by Musk and his companies, to which Musk responded: "Cut them all, right now." Trump also said he does not want to own EVs because they might explode, and threatened to "consider deporting" Musk.

President Xi Jinping presided over the sixth meeting of the Central Financial and Economic Affairs Commission, which discussed issues such as advancing the construction of a unified national market and promoting high-quality development of the marine economy. The meeting emphasized regulating enterprises' low-price and disorderly competition in accordance with laws and regulations, guiding enterprises to improve product quality, and promoting the orderly exit of backward production capacity. The Caixin China General Services PMI for June was 50.4, 2.1 percentage points higher than in May and the same as in April, returning above the critical point.

Spot Market Fundamentals:

SHFE lead remained in a weak consolidation phase. Suppliers shipped goods according to market conditions, with some suppliers' quoting enthusiasm declining due to fewer downstream inquiries. The situation was similar for cargoes self-picked up from primary lead smelters, with some suppliers offering discounts and others maintaining slightly firmer quotes. Downstream enterprises had limited demand, with inquiries being more dispersed and more bargaining taking place. It was difficult for buyers and sellers to reach a consensus, resulting in sluggish transactions in the spot market. The mainstream ex-factory tax-included prices of secondary refined lead were at a discount of 50-0 yuan/mt against the SMM 1# lead average price. Downstream enterprises had average purchasing willingness, and transactions were poor.

Inventory: On July 1, LME lead inventory decreased by 1,850 mt to 270,075 mt. As of June 30, the total social inventory of SMM lead ingots in five locations reached 56,300 mt, an increase of over 600 mt from June 23 and over 300 mt from June 26.

》Click to view SMM Metal Industry Chain Database

Today's Lead Price Forecast:

The tight supply situation in the waste lead-acid battery market continues, with some recyclers' purchasing enthusiasm declining. "Purchase quotes have been lowered, and we are waiting passively for goods."It is expected that the supply of lead ingots will continue to increase in July, with some regions seeing the arrival of imported crude lead. Downstream consumption remains weak, and battery producers have high inventories of both raw material lead ingots and finished battery products. Overall, lead prices may remain in the doldrums in the short term.