Macro uncertainty coexists with a stalemate in fundamentals; lead prices may maintain a consolidation trend [SMM Weekly Lead Market Forecast]

         Next week, macroeconomic data will mainly include the US July unadjusted CPI YoY, the US July PPI YoY, China's July total retail sales of consumer goods YoY, China's July value-added industrial output above designated size YoY, and the initial estimate of the US August one-year inflation rate expectation. Given signs of weakness in the US labour market and risks surrounding Trump's latest nominations for the US Fed, the market expects the US Fed to cut interest rates ahead of schedule in September.

For LME lead, due to rising expectations for a US Fed interest rate cut in September, the US dollar index has declined successively, while non-ferrous metals have stopped falling and rebounded. LME lead has regained the $2,000/mt level this week. However, there is still much uncertainty in tariff negotiations between the US and multiple countries, leading to cautious market trading. LME lead inventory has turned down on a weekly basis but remains at a high level, resulting in insufficient momentum for lead price increases. It is expected that LME lead will trade within the range of $1,965-$2,020/mt next week.

Domestically, for SHFE lead, environmental protection factors have not yet been lifted for secondary lead enterprises in Anhui province. Meanwhile, lead-acid battery enterprises have entered the high-temperature holiday period, resulting in a temporary decline in both supply and demand for lead ingots. Additionally, the SHFE lead 2508 contract will enter delivery next week, and the available spot market supply is expected to decrease relatively. At the same time, the risk of visible inventory accumulation due to lead ingot transfer to delivery warehouse before delivery has increased. It is expected that lead prices will consolidate next week, with the most-traded SHFE lead contract trading within the range of 16,700-16,950 yuan/mt.

Spot price forecast: 16,600-16,800 yuan/mt. The supply and demand in the primary lead market are relatively loose, and suppliers' enthusiasm for selling has increased, with the possibility of spot discounts expanding. For secondary lead, factors such as losses and environmental protection are intertwined, resulting in significant regional supply differences. Secondary refined lead prices in some areas may continue to be inverted compared to primary lead. On the consumption side, the traditional peak season performance of the lead-acid battery market has been average, with downstream enterprises cautiously increasing production. Most enterprises will maintain a purchasing as needed model.