The growth of lead ingot social inventory slowed down WoW, and lead prices held up well [SMM Lead Morning Meeting Summary]

Futures Market:

Overnight, LME lead opened at $2,010/mt, fluctuating rangebound in the Asian session. Entering the European session, it slightly rose to a high of $2,017.5/mt, with bulls and bears vying for control. LME lead then dipped to a low of $1,994/mt before rallying again in the tail end, closing at $2,015/mt, up 0.17%.

Overnight, the most-traded SHFE lead 2508 contract opened at 16,950 yuan/mt, touching a low of 16,910 yuan/mt early in the session. After bears reduced their positions, it rallied, reaching a high of 16,990 yuan/mt during the session, and closed at 16,965 yuan/mt, up 0.18%.

Macro Front:

US Treasury Secretary Bessent: If inflation data is low, interest rates should be lowered. If secondary sanctions are imposed on Russia, the US will urge Europe to follow suit. Trump Media & Technology Group announced that its total purchases of Bitcoin reserves have reached $2 billion, and the group plans to continue acquiring Bitcoin and related assets.

The President of the European Council and the President of the European Commission will visit China and hold the 25th China-EU Leaders' Meeting. China's Ministry of Commerce expressed firm opposition to the EU's 18th round of sanctions against Russia, which included Chinese companies and financial institutions on the sanctions list. Five departments, including the Hainan Branch of the People's Bank of China, issued the Implementation Rules for Cross-border Asset Management Pilot Business in the Hainan Free Trade Port. The automotive industry is "combating the rat race," with Guangdong and Anhui further regulating the competitive order of the NEV industry. The sixth round of inspections by the 20th Central Committee has completed its deployment.

Favorable macro expectations drove non-ferrous metals into positive territory, with SHFE lead holding up well. Suppliers actively expanded discounts to sell, with some further widening discounts after the first round of quotations. Downstream enterprises purchased as needed, with some large-discount cargoes being transacted. In major producing areas, primary lead smelters had limited inventory, with some spot orders quoted firmly, offering factory delivery at parity with the SMM #1 lead average price. Secondary lead smelters' reluctance to sell at low prices eased, with quotations increasing relatively. Secondary refined lead was quoted at a premium of 0-50 yuan/mt against the SMM #1 lead average price for factory delivery.

Inventory: On July 21, LME lead inventory decreased by 3,475 mt to 264,925 mt. As of July 21, the total social inventory of SMM lead ingots in five regions reached 71,300 mt, an increase of 7,900 mt from July 14 and an increase of 2,300 mt from July 17.

Today's Lead Price Forecast:

After lead prices stopped falling and rebounded, the enthusiasm of lead smelters for selling has recovered, especially secondary lead smelters planning to resume production as needed. The spot circulation volume in some regions has increased, providing downstream enterprises with more purchasing options. Currently, there is no significant improvement in end-use consumption in the lead-acid battery market. Downstream enterprises are only making just-in-time procurement, resulting in a slow digestion of social inventory of lead ingots. Additionally, some suppliers continue to transfer inventory to social warehouses, and the growth trend of social warehouses remains unchanged. Furthermore, due to the maintenance status of some primary lead enterprises in Central China, the issue of regional tight supply still exists. Therefore, the growth trend of social inventory of lead ingots has slowed down compared to last week. Overall, lead prices may hold up well in the short term.
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