Domestic and overseas lead ingot inventory both rises, lead prices to remain in the doldrums in the short term [SMM Lead Morning Meeting Summary]

Futures Market:

Overnight, LME lead opened at $2,019/mt. The market awaited new developments on US tariffs on August 1, while LME lead inventory increased by over 6,000 mt for two consecutive days, leading to rising inventory pressure. LME lead fluctuated downward throughout the day. The US Fed's interest rate decision was announced overnight, with the US dollar index rising strongly. LME lead fell below the $2,000/mt integer mark, reaching a low of $1,989/mt. By the end of the session, LME lead closed at $1,992/mt, down 1.39%, recording five consecutive negative sessions.

Overnight, the most-traded SHFE lead 2509 contract opened at 16,885 yuan/mt. Lead warrant inventory continued to accumulate, while the issue of losses in secondary lead smelting had not yet been resolved. Bulls and bears remained deadlocked throughout the session, with SHFE lead fluctuating mostly between 16,850-16,900 yuan/mt. It eventually closed at 16,880 yuan/mt, down 0.06%, with open interest at 66,552 lots, a decrease of 189 lots from the previous trading day.

Macro:

The US Fed held rates steady for five consecutive meetings, but two voting members supported an interest rate cut, citing slowing economic growth. Powell did not provide guidance on a September rate cut, emphasizing uncertainties in tariffs and inflation, and stating that the job market had not weakened. The US suspended the minimum exemption treatment for low-value goods. Trump stated that the US would impose a 25% tariff and "punishment" on India, citing India as a major buyer of Russian energy. Trump announced a comprehensive trade agreement with South Korea, imposing a 15% tariff, with South Korea to provide $350 billion in investment to be owned and controlled by the US. Trump signed an executive order to impose a 50% tariff on Brazil.

In the lead spot market yesterday, SHFE lead was in the doldrums. Suppliers shipped goods according to market conditions. In the Jiangsu, Zhejiang, Shanghai region, cargoes were quoted at premiums of -50-0 yuan/mt against the SHFE lead 2508 contract, or at premiums of -40-0 yuan/mt against the SHFE lead 2509 contract. Meanwhile, the supply of cargoes self-picked up from primary lead smelters increased relatively, with quoted premiums expanding (factory delivery at premiums of -150-100 yuan/mt against the SHFE lead 2509 contract). Downstream enterprises purchased as needed, with some intending to purchase at lower prices, showing positive inquiry enthusiasm. Additionally, there were differences in the shipping of secondary lead smelters, with some enterprises lowering quoted premiums, while others held back on selling at lower prices, with quoted premiums remaining relatively firm. Secondary refined lead was quoted at premiums of 0-30 yuan/mt against the SMM #1 lead average price for factory delivery.

Inventory: As of July 29, LME lead inventory increased by 6,025 mt to 276,375 mt. The total inventory of SHFE lead ingot warrants was 61,934 mt, an increase of 1,002 mt from the previous day.

Lead Price Forecast for Today:

Recently, with the resumption of production at primary lead and secondary lead smelters and the commissioning of new capacity, the supply tightness of lead ingots has eased, and spot lead premium transactions have decreased. As of yesterday, primary lead smelters in major producing areas were quoted at premiums of 0-50 yuan/mt against the SMM #1 lead average price for factory delivery. Meanwhile, domestic and overseas lead ingot inventories have been rising at a premium day by day, putting significant pressure on the lead price. Before there is a notable improvement in lead consumption, the lead price may remain in the doldrums with a fluctuating trend.

Data Source Statement: Except for publicly available information, all other data are based on publicly available information, market exchanges, and rely on SMM's internal database models. They are processed by SMM and are for reference only, not constituting decision-making advice.