Futures Market:
Overnight, LME lead opened at $1,988/mt, fluctuated downward during the Asian session, rebounded after hitting a low of $1,980/mt in the European session, reached a high of $1,996.5/mt, and finally closed at $1,990/mt, up $2/mt or 0.10%.
Overnight, the most-traded SHFE lead contract opened lower with a gap at 16,820 yuan/mt, rose slightly in the early session, reached a high of 16,870 yuan/mt before weakening under pressure, hit a low of 16,790 yuan/mt, and finally closed at 16,805 yuan/mt, down 10 yuan/mt or 0.06%.
Macro: The US July PPI annual rate was 3.3%, significantly exceeding the market expectation of 2.5%. The number of initial jobless claims in the US decreased that week. The Hong Kong Monetary Authority and the Securities and Futures Commission of Hong Kong issued a joint statement on market volatility related to stablecoins. The People's Bank of China: Will conduct 500 billion yuan of outright reverse repo operations.
Spot Fundamentals:
In the Shanghai market, Chihong and Honglu lead were quoted at discounts of 30-20 yuan/mt against the SHFE lead 2509 contract. In the Jiangsu-Zhejiang market, Jijin and JCC lead were quoted at discounts of 40-30 yuan/mt against the SHFE lead 2509 contract. With SHFE lead continuing to consolidate and approaching delivery, some suppliers' enthusiasm for selling decreased slightly, and the quoted discounts remained largely unchanged. Downstream enterprises purchased on a need-based and selective basis, but purchases were relatively scattered. Additionally, cargoes self-picked up from electrolytic lead smelters continued to be sold at discounts, with mainstream regional quotes ranging from discounts of 20 yuan/mt to premiums of 50 yuan/mt against the SMM #1 lead average price, or discounts of 170-120 yuan/mt against the SHFE lead 2509 contract. For secondary refined lead, the market saw an increase in available supplies, with secondary refined lead quoted at discounts of 50 yuan/mt to 50 yuan/mt against the SMM #1 lead average price.
Inventory: On August 12, LME lead inventory decreased by 550 mt to 261,675 mt. According to SMM, as of August 14, the total social inventory of lead ingots in five regions tracked by SMM reached 71,700 mt, an increase of about 600 mt from August 7 and an increase of 1,700 mt from August 11.
Today's Lead Price Forecast:
As the SHFE lead 2508 contract approaches delivery, suppliers are increasing their warehouse transfers for delivery. The estimated delivery volume this month is around 11,000 mt, and social warehouses for lead ingots are expected to accumulate as scheduled. Subsequent increases in warehouse transfers for delivery brands may be relatively limited. Additionally, downstream enterprises have recently been producing based on sales. The traditional peak season for the lead-acid battery market has not yet materialized, coupled with the jump initially and then pull back of lead prices, the purchasing enthusiasm of some battery enterprises has declined, with most adopting a wait-and-see approach. In the short term, lead prices are weakening to test cost support. Despite insufficient upward rebound momentum, supply contradictions such as scrap batteries and lead concentrates will still limit the increase in refined lead supply. It is expected that the decline space for lead prices will be limited, and lead prices may continue to fluctuate downward 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 not constituting decision-making advice.
