The activity level in the spot market is average, and the trend of lead prices has returned to fundamentals [SMM Lead Morning Meeting Summary]

Futures Market:

Overnight, LME lead opened at $2,013/mt, fluctuating downward during the Asian session to a low of $2,000.5/mt. It rebounded and gained ground in the European session, reaching a high of $2,036/mt in the closing session, and finally closed at $2,028.5/mt, up 0.69%.

Overnight, the most-traded SHFE lead 2509 contract opened higher with a gap at 16,910 yuan/mt, touching a high of 16,945 yuan/mt in the early session. However, dragged down by the fundamental situation of lead, it fluctuated downward and finally closed at 16,850 yuan/mt, down 0.44%.

Macro Aspects:

The EU is preparing to impose a 30% tariff on $100 billion worth of US goods in the absence of a deal. US Treasury Secretary Bessent: The EU's retaliatory measures are a negotiating tactic. Trump: Will impose simple tariffs ranging from 15% to 50% on most countries. Will always be willing to forgo tariff provisions if major countries can be persuaded to open their markets to the US. The General Administration of Customs of China issued the "Interim Measures for the Collection and Management of Taxes on Goods with Added Value in Processing in the Hainan Free Trade Port under the Customs of the People's Republic of China". He Lifeng will travel to Sweden from July 27 to 30 for economic and trade talks with the US side.

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SHFE lead maintained a consolidation trend, with suppliers shipping goods according to market conditions. Quotations were mainly at discounts. Downstream enterprises purchased on a need-based basis, buying the dip, with inquiry enthusiasm improving in some regions. However, cargo transactions in warehouses in Jiangsu, Zhejiang, and Shanghai remained limited. Additionally, electrolytic lead smelters had low inventory, and cargoes self-picked up from production site were quoted relatively firmly, with mainstream regions quoting at premiums of 0-100 yuan/mt against the SMM #1 lead average price. Secondary lead producers also refused to budge on prices, with secondary refined lead quoted at premiums of 0-75 yuan/mt against the SMM #1 lead price. However, transactions for high-priced cargoes were sluggish.

Inventory Aspects: On July 23, LME lead inventory increased by 650 mt to 263,150 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:

With macro tailwinds exhausted, the upward momentum of non-ferrous metals, especially lead prices, has been frustrated, and the lead price trend has quickly returned to fundamentals. After the lead price fell, the inquiry enthusiasm of some downstream enterprises improved. However, lead smelters were not enthusiastic about shipping goods, and due to limited spot order cargoes, quotations remained firm. It is reported that most downstream battery producers currently have raw material inventory exceeding seven days, so their willingness to purchase lead ingots is not urgent, and they are still observing the price trend. Overall, the trading activity in the lead market is average, and lead prices may still fluctuate in the short term.

Data source statement: Except for publicly available information, all 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 do not constitute decision-making advice.