Macro weakens, returning to fundamentals; lead price fluctuates at highs [SMM Lead Morning Meeting Summary]

Futures Market:

Overnight, LME lead opened at $2,038/mt. The impact of US tariffs continued to unfold, with market focus shifting from concerns about economic slowdown to specific metal tariff policy changes, such as the expected imposition of copper tariffs. Nonferrous metals gradually recovered from the previous day's losses, with LME lead fluctuating upward overall and moving to around $2,062/mt. LME lead finally closed at $2,044/mt, up 0.32%.

Overnight, the most-traded SHFE lead 2508 contract opened at 17,190 yuan/mt. The tariff impact weakened, and traders' focus returned to fundamentals. Traditional consumption expectations remained, with longs adding positions again at the start of SHFE lead trading, pushing lead prices above 17,200 yuan/mt and reaching a session high of 17,280 yuan/mt. SHFE lead finally closed at 17,275 yuan/mt, up 0.93%, with open interest increasing by 769 lots to 52,386 lots compared to the previous trading day.

》Click to view SMM lead spot historical quotes

Macro Aspects: US President Trump stated that reciprocal tariffs would be implemented from August 1 without further delay, warning that EU tax letters were imminent. Trump threatened 50% tariffs on copper and 200% tariffs on pharmaceuticals, with near-month COMEX copper contracts posting their largest gains since 1968. Multiple countries responded to Trump's tariffs: Japan and South Korea sought continued negotiations, South Africa argued rates could still be lowered, and Brazil angrily denounced them and emphasized countermeasures. The US Treasury Secretary spoke with Japan's chief negotiator by phone and was rumored to visit Japan next week. Germany warned that the EU was prepared to retaliate if a fair trade agreement could not be reached. Trump said he was "very unhappy" with Putin and threatened additional sanctions against Russia. Additionally, the US Fed reported that US one-year inflation expectations in June fell to a five-month low, with reduced concerns about layoffs.

Spot Fundamentals:

In yesterday's lead spot market, the trading center of SHFE lead further declined, with suppliers narrowing their quoted discounts slightly. Cargoes in Jiangsu, Zhejiang, and Shanghai warehouses were quoted at discounts of 60-10 yuan/mt against the SHFE lead 2508 contract. Meanwhile, primary lead smelters also narrowed their quoted discounts for self-picked-up cargoes, with major production areas quoting discounts of 30 yuan/mt to premiums of 20 yuan/mt against the SMM 1# lead average price. Secondary lead smelters held back low-priced sales, with secondary refined lead quoted at discounts of 30-0 yuan/mt against the SMM 1# lead average price, and a few regions reporting premiums of 20-50 yuan/mt. Downstream enterprises showed strong wait-and-see sentiment, with some buying the dip as needed, and spot order transactions for primary lead improved regionally.

Inventory: As of July 8, LME lead inventories decreased by 1,900 mt to 258,075 mt, while SHFE lead warrant inventories rose by 899 mt to 47,713 mt compared to the previous day.

》Click to view SMM metal industry chain database

Today's Lead Price Forecast:

Recently, the impact of US tariffs continued to unfold, with market focus shifting from global concerns about economic slowdown to specific metal tariff policy changes, such as the expected imposition of copper tariffs, bringing some upward expectations. From a fundamental perspective, the lead-acid battery market is in the transition period between the off-season and peak season. The production and procurement enthusiasm of downstream enterprises have improved compared to June. However, the resumption of production by lead smelters is constrained by the limited supply of raw materials, and the progress of supply increase is slower than expected. It is anticipated that lead prices will fluctuate at highs, while attention should also be paid to the risks of US tariff policies.