The transaction of cargoes self-picked up from production site has relatively improved. Lead prices may hold up well in the near term [SMM Morning Lead Meeting Summary]

Futures Market:

Overnight, LME lead opened at US$2,057.5/mt, touched a low of US$2,057/mt early in the session, and then fluctuated upward to a high of US$2,073/mt. Entering the European session, it oscillated around the intraday average line and finally closed at US$2,063/mt, down 0.02%.

Overnight, the most-traded SHFE lead 2508 contract opened lower with a gap at 17,220 yuan/mt, touched a low of 17,215 yuan/mt early in the session, and then fluctuated upward due to bears reducing their positions, finally closing at a high of 17,305 yuan/mt, up 0.26%.

》Click to view historical spot quotes for SMM lead

Macro Aspects:

The US "CHIPS and Science Act" was passed by the House of Representatives after two Republican senators switched their votes. Trump is expected to send a letter to trading partners as early as Friday local time to inform them of unilateral tariff rates. Non-farm payrolls data unexpectedly came in better than expected, leading traders to no longer bet on a US Fed interest rate cut in July, and also reducing the probability of a cut in September. The US lifted export restrictions on China imposed by three of the world's largest chip design software suppliers. China's Ministry of Commerce: Will strengthen guidance on used car exports to promote their healthy and orderly development.

Spot Fundamentals:

SHFE lead held up well, with suppliers actively shipping out goods. Quoted premiums expanded further compared to yesterday, with some regions' electrolytic lead cargoes self-picked up from production site also seeing expanded premiums, at a discount of 100-220 yuan/mt against the most-traded SHFE lead 2508 contract. Secondary lead smelters shipped out goods at market prices, with secondary refined lead quoted at a discount of 50-0 yuan/mt against the SMM 1# lead average price, and a few discounts exceeding 100 yuan/mt. Downstream enterprises showed slightly better enthusiasm for inquiries and were willing to receive some cargoes with large discounts. Warrant cargoes saw average transactions, while cargoes self-picked up from production site saw relatively better transactions.

Inventory: On July 3, LME lead inventory decreased by 2,250 mt to 265,900 mt. As of July 3, the total social inventory of SMM lead ingots in five regions reached 56,900 mt, up about 900 mt from June 26 and up about 600 mt from June 30.

》Click to view the SMM Metal Industry Chain Database

Today's Lead Price Forecast:

On the supply side, a secondary lead smelter in east China recently resumed production and is expected to start normal lead output by the end of this week. After the lead price rose, the supply of secondary lead gradually increased. Additionally, a primary lead smelter in east China plans to conduct maintenance in Q4, which has boosted market sentiment. Although the consumption of lead-acid batteries has not significantly improved, some downstream battery producers have prepared in advance for the peak season, leading to an improvement in the operating rate and an increase in the demand for long-term contract lead ingot pick-ups. Overall, lead prices may maintain a relatively strong oscillation in the near term, but attention should be paid to the drag of actual consumption performance and lead ingot supply on lead prices.