SHFE lead 2507 contract delivered smoothly; unreported inventory of lead ingots emerged, dragging down lead prices [Brief comment on lead futures]

SMM reported on July 15:

During the day, the SHFE lead 2507 contract for the current month closed at 16,885 yuan/mt, with a settlement price of 16,870 yuan/mt, an open interest of 3,525 lots, a delivery volume of 17,625 mt, and a warrant inventory of 58,768 mt. The SHFE lead 2507 contract achieved a smooth delivery.

During the day, the most-traded SHFE lead 2508 contract opened at 17,045 yuan/mt, fluctuated downward after opening, and reached a low of 16,925 yuan/mt in the late session, closing at 16,930 yuan/mt, down 0.91%, with an open interest of 52,667 lots, and recording a small bearish candlestick.

Today, downstream enterprises mostly preferred to purchase cargoes self-picked up from production sites of smelters with relatively lower prices. With the delivery of the SHFE lead 2507 contract, suppliers transferred their stocks to delivery warehouses, and unreported inventory was revealed as expected, dragging down lead prices. However, in terms of supply, the new capacity of primary lead enterprises in Central China recently put into operation fell short of expectations, and unplanned maintenance occurred, resulting in a regional tight supply of lead ingots. Delivery brand enterprises had limited cargoes available for delivery to warehouses, and the increase in lead ingot transfers to warehouses slowed down. After the weakening of lead prices, some suppliers held back from selling, and the support at the 17,000 yuan/mt level remained moderate. Peak-season consumption still needs to be verified, and in the short term, lead prices may continue to fluctuate in the doldrums.

Data source statement: Except for publicly available information, other data are processed by SMM based on publicly available information, market exchanges, and relying on SMM's internal database model, for reference only and not constituting decision-making advice.

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