SHFE lead recorded two consecutive negative days. Be cautious of inventory changes in LME lead ingots [Lead futures brief comment]

SMM News on July 16:

The most-traded SHFE lead 2508 contract opened at 16,920 yuan/mt on the day. Bears increased their positions, causing SHFE lead to fluctuate downward and reach a low of 16,855 yuan/mt. It eventually closed at 16,895 yuan/mt, down by 0.21%, with an open interest of 53,407 lots, marking two consecutive days of decline.

In terms of supply, there is only a slight expectation of recovery for secondary refined lead in July. Regular maintenance of primary lead in Yunnan, Inner Mongolia, and other regions has not yet concluded. The contradiction in raw material supply provides strong bottom support for lead prices. Delivery brand enterprises have limited sources available for transfer to delivery warehouse. After the completion of transfer to delivery warehouse and inventory relocation, the expected increase in domestic social inventory is expected to slow down. Lead prices have stopped falling and stabilized at the bottom in the short term. Subsequent rebounds still require support from the actual performance of downstream operations and end-use consumption. Lead prices may still continue to fluctuate and consolidate. Be cautious of the drag on lead prices caused by the surge in LME lead ingot inventory.

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