Lead ingot supply is regionally tight and macro sentiment is warm, upward momentum for lead prices reappears [SMM Lead Morning Meeting Summary]

Futures Market:

Last Friday, LME lead opened at $1,970.5/mt. During the Asian session, it fluctuated at lows, with a low of $1,967/mt. Entering the European session, boosted by macroeconomic news from the Chinese market, LME lead rallied, reaching a high of $2,014/mt in the late session, and finally closed at $2,011.5/mt, up 1.72%.

On the evening of last Friday, the most-traded SHFE lead 2508 contract opened higher with a gap at 16,850 yuan/mt and then rallied firmly. As the MIIT spoke about promoting the stable development of key industries such as non-ferrous metals, bears reduced their positions, pushing SHFE lead to a high of 16,995 yuan/mt. It finally closed at a high of 16,980 yuan/mt, up 0.95%.

Macro Aspects:

Last Friday, influenced by dovish remarks from Fed Governor Waller and a cooling of consumer inflation expectations, the US dollar index pulled back. The US Secretary of Commerce expressed confidence in reaching an agreement with the EU, with small countries needing to pay a 10% benchmark tariff. Tariffs will start to be imposed on August 1. British media reported that the London Stock Exchange Group is considering launching 24-hour trading.

China's Ministry of Commerce: This year, China's total retail sales of consumer goods are expected to exceed 50 trillion yuan. The Office of the National Export Control Coordination Mechanism has deployed and advanced a special campaign to combat the smuggling and export of strategic minerals. Xie Shaofeng, Chief Engineer of the MIIT: Work plans for stabilizing growth in ten key industries, including steel, non-ferrous metals, and petrochemicals, are about to be issued. The MIIT will promote key industries to focus on adjusting their structures, optimizing supply, and eliminating backward production capacity.

Last Friday, SHFE lead continued to be in the doldrums. Suppliers quoted prices in line with the market, with slight differences in selling. Quoted spot discounts narrowed and expanded simultaneously. Downstream enterprises purchased on a need-based basis at lows, with some engaging in more price negotiations. The market in Jiangsu, Zhejiang, and Shanghai saw relatively improved transactions. Additionally, cargoes self-picked up from primary lead smelters were limited. Some smelters, due to declining inventories, generally refused to budge on prices when selling. The price spread between the north and south regions narrowed, with most reporting parity with the SMM #1 lead average price for factory delivery. Secondary lead smelters had a strong reluctance to sell at low prices. In some regions, quoted prices for secondary refined lead were at premiums of 0-100 yuan/mt against the SMM #1 lead price for factory delivery. Downstream enterprises' demand leaned towards the primary lead market.

Inventory: On July 18, LME lead inventories decreased by 2,550 mt to 268,400 mt. As of July 17, the total social inventory of SMM lead ingots in five regions reached 69,000 mt, an increase of approximately 7,900 mt from July 10 and an increase of 5,600 mt from July 14.

Today's Lead Price Forecast:

The impact of maintenance at primary lead smelters has intensified, coupled with an expansion in losses for secondary lead smelters. Finished product inventories at smelters have generally declined, and there has been a regional tightening of circulating supplies. Last week, spot discounts for lead narrowed significantly compared to the previous week, potentially providing strong support for lead prices. In addition, the Ministry of Industry and Information Technology (MIIT) said last Friday that it would introduce a work plan to stabilize growth in ten key industries, including non-ferrous metals, which may inject new momentum into the lead market.