Futures Market:
Overnight, LME lead opened at $2,041/mt. During the Asian session, it first declined and then rebounded, with a low of $2,034.5/mt. Entering the European session, with bulls increasing their positions, LME lead surged to $2,065/mt and finally closed at $2,063.5/mt, up 1.2%.
Overnight, the most-traded SHFE lead 2508 contract opened higher with a gap at 17,235 yuan/mt. It briefly touched a low of 17,220 yuan/mt in the early session and then fluctuated upward due to bulls increasing their positions, reaching a high of 17,295 yuan/mt. It finally closed at 17,270 yuan/mt, up 0.64%.
》Click to view historical spot quotes for SMM lead
Macro Aspects:
In June, the US "ADP employment data" recorded the largest decline since March 2023. Interest rate futures almost fully priced in a September interest rate cut by the US Fed. Trump announced a trade agreement with Vietnam, imposing a 20% tariff. Zhang Guoqing, Vice Premier of the State Council of China, emphasized the importance of leveraging technology to drive innovation and accelerate high-quality development in the manufacturing sector. The Hong Kong SAR government announced the initial implementation phase of the "Guangdong Vehicles Southbound" scheme, with a daily quota of 100 vehicles. The China Passenger Car Association (CPCA) estimated that nationwide wholesale sales of passenger NEVs by manufacturers reached 1.26 million units in June, up 29% YoY.
SHFE lead continued to consolidate. Suppliers offered quotes at discounts. During this period, cargoes self-picked up from primary lead smelters were still sold at discounts, with quotes ranging from a discount of 50 yuan/mt to a premium of 100 yuan/mt against the SMM 1# lead average price. Secondary lead enterprises also sold at discounts, with secondary refined lead quotes ranging from a discount of 50 yuan/mt to a premium of 0 yuan/mt against the SMM 1# lead average price, and in a few regions, as low as a discount of 120 yuan/mt. Downstream enterprises maintained purchasing as needed, with some enterprises expressing interest in receiving cargoes at large discounts. However, there were differences in bargaining between buyers and sellers, and spot market transactions did not show significant improvement.
Inventory: On July 2, LME lead inventory decreased by 1,925 mt to 268,150 mt. As of June 30, the total social inventory of SMM lead ingots in five regions reached 56,300 mt, an increase of over 600 mt from June 23 and over 300 mt from June 26.
》Click to view the SMM Metal Industry Chain Database
Today's Lead Price Forecast:
The operating rate of downstream battery producers is expected to improve, with increased willingness to pick up long-term contract cargoes of lead ingots. The market sentiment is bullish, and bulls have been increasing their positions significantly in the near term. On the supply side, smelters are showing positive production enthusiasm, and imported crude lead is flowing into the domestic market. Attention should be paid to the impact of changes in lead ingot supply on lead prices in the near future.
