Domestic lead ingot inventory has accumulated and increased, and lead prices are expected to fluctuate and pull back [SMM Lead Morning Meeting Summary]

Futures Market:

Overnight, LME lead opened at US$2,055/mt. During the Asian session, LME lead held up well and surged to a high of US$2,071.5/mt during the session. However, in the European session, after surging, LME lead pulled back, coupled with the strengthening of the US dollar index, LME lead erased all its daytime gains, and its center of gravity moved further downward overnight, eventually closing at US$2,037/mt, down 1.04%.

Overnight, the most-traded SHFE lead 2508 contract opened at 17,200 yuan/mt. Dragged down by the cumulative increase in lead ingot inventory, SHFE lead fell rapidly after the opening, dropping below 17,150 yuan/mt. It then consolidated between 17,110-17,140 yuan/mt for a relatively long time until it finally closed at 17,115 yuan/mt, down 0.58%. Its open interest reached 52,390 lots, a decrease of 144 lots from the previous trading day.

》Click to view historical SMM lead spot quotes

Macro Aspects: Before the August "deadline" for US tariffs, Myanmar sought to lobby Trump for a drastic tariff cut, proposing zero tariffs for the US. Brazilian President: Will engage in tariff negotiations with the US and take reciprocal countermeasures if ineffective. Trump: Imposes a 50% tariff on copper, effective from August 1. Racing against the tariff deadline, traders began shipping copper to Hawaii. HSBC: August 1, 50% tariff, a turning point for SHFE copper and LME copper. Additionally, Fed Governor Waller: Consideration could be given to an interest rate cut in July, supporting continued balance sheet reduction and increasing the proportion of short-term assets. Fed disagreements emerge again: Some claim that the impact of tariffs on inflation will not be long-lasting, while others predict effects extending into next year.

Spot Market Fundamentals:

In yesterday's lead spot market, SHFE lead held up well, and suppliers quoted prices accordingly, with quoted discounts basically stable. Warehouse supplies in the Jiangsu, Zhejiang, Shanghai region were quoted at discounts of 60-20 yuan/mt against the SHFE lead 2508 contract. Downstream enterprises only made just-in-time procurement, with generally low enthusiasm for inquiries, and warehouse supplies in the Jiangsu, Zhejiang, Shanghai region saw sluggish transactions. Additionally, inventory at some smelters in the main production areas of primary lead decreased, possibly considering transfer to delivery warehouse. Suppliers' quoted prices varied widely, with discounts of 50 yuan/mt to premiums of 100 yuan/mt against the SMM 1# lead average price ex-factory. Furthermore, secondary lead enterprises quoted prices accordingly, and due to regional supply differences, secondary refined lead was quoted at discounts of 150-0 yuan/mt against the SMM 1# lead average price ex-factory, with a few premiums of 50 yuan/mt. Downstream enterprises mostly made purchases under long-term contracts, with a strong wait-and-see sentiment for spot orders, resulting in uneven spot transactions.

Inventory: As of July 10, LME lead inventory decreased by 2,725 mt to 252,375 mt. The total social inventory of SMM lead ingots in five regions reached 61,100 mt, an increase of 4,200 mt from July 3 and an increase of 3,200 mt from July 7.

》Click to view the SMM Metal Industry Chain Database

Today's lead price forecast:

Recently, maintenance and new capacity commissioning have coexisted in primary lead and secondary lead smelters. Meanwhile, lead prices have fluctuated at highs, and suppliers have mostly sold at discounts. Cargoes in Jiangsu, Zhejiang, and Shanghai warehouses were quoted at premiums of -80 to -20 yuan/mt against the SHFE lead 2508 contract. However, downstream enterprises have scattered demand, and their rigid demand is more inclined to purchase cargoes self-picked up from production sites of smelters. Some downstream enterprises have strong wait-and-see sentiment due to high prices, leading to a cumulative increase in social inventory of lead ingots. In addition, the SHFE lead 2507 contract is approaching delivery next week. Considering that the current spread between futures and spot prices of lead exceeds 200 yuan/mt, suppliers intend to transfer inventory to delivery warehouses, which is also one of the main factors driving the increase in social inventory of lead ingots. The cumulative increase in inventory may drag lead prices relatively lower.