Lead supply and demand remain at a stalemate, waiting for macro factors to break the deadlock. Lead prices will continue to consolidate next week [SMM Weekly Lead Market Forecast]

         Next week, there will be limited important macroeconomic data, mainly including the preliminary S&P Global US Manufacturing PMI for August and the final annual rate of the Eurozone's July CPI. More notably, the US Fed will release the minutes of its monetary policy meeting and its expectations for the interest rate decision in September.

For LME lead, LME lead inventory continued its downward trend this week, with a weekly decrease of nearly 5,000 mt. However, the LME lead cash-3M contango diverged from this trend, widening to -$40.87/mt. Given the significant uncertainty surrounding overseas market tariffs, some downstream enterprises intend to temporarily suspend the progress of overseas factory construction or project commissioning, limiting expectations for support in lead consumption. It is anticipated that LME lead will maintain a consolidation trend, trading within the range of $1,975-$2,020/mt.

Domestically, for SHFE lead, the impact of environmental protection factors in Anhui province has eased, and primary lead enterprises have largely resumed production, resulting in a relatively loose supply of lead ingots. However, the anticipated peak consumption season for lead has not yet materialized, and there is still a slight upward trend in lead ingot inventory. Additionally, frequent news about overseas imported lead arriving in China has emerged, but this has not yet been verified. Currently, only a certain amount of crude lead from Southeast Asia has been flowing in, with limited impact on lead prices. It is expected that the most-traded SHFE lead contract will trade within the range of 16,700-17,000 yuan/mt next week.

Spot price forecast: 16,600-16,850 yuan/mt. Next week, lead ingot supplies will re-enter the circulation market after delivery. Meanwhile, some smelters have received notices about potential restrictions on logistics and transportation from late August to early September. As a result, suppliers' enthusiasm for selling will increase, and it will be temporarily difficult to significantly narrow spot discounts. Furthermore, the improvement in losses for secondary lead remains limited, and smelters will continue to refuse to budge on prices when selling. The situation where secondary lead prices are lower than primary lead prices in some regions may persist.