Macro and fundamentals show mediocre performance, short-term lead prices may continue to consolidate [SMM Lead Morning Meeting Summary]

Futures:

Overnight, LME lead opened at $1,982.5/mt. After opening, the overall center of gravity for LME lead prices shifted downward, especially as the US dollar index rose during the session, causing LME lead prices to fall under pressure to $1,968/mt, reaching a near two-week low. During the night, LME lead gradually recovered from its losses, ultimately closing at $1,980.5/mt, down 0.03%.

Overnight, the most-traded SHFE lead 2509 contract opened at 16,790 yuan/mt. Domestic secondary lead production cuts coexisted with weak consumption. After opening, SHFE lead prices saw continuous battles between bulls and bears, with SHFE lead prices oscillating mostly between 16,770-16,820 yuan/mt until finally closing at 16,795 yuan/mt, up 0.03%. Its open interest reached 49,020 lots, a decrease of 476 lots from the previous trading day.

Macro:

Chinese Premier Li Qiang: Take effective measures to consolidate the stabilization and recovery of the real estate market, foster and expand service consumption, and intensify efforts to expand effective investment. The US-India trade agreement remains uncertain. Trump's advisor harshly criticized India: earning money from the US while buying Putin's oil.

:

In the lead spot market yesterday, SHFE lead maintained a consolidation trend. Meanwhile, after delivery, cargoes re-entered the market. Suppliers quoted prices in line with market conditions, mostly offering at small discounts. In the Jiangsu, Zhejiang, Shanghai region, quotations were at discounts of 30-0 yuan/mt against the SHFE lead 2509 contract. Additionally, there were slight differences in the quoted prices for cargoes self-picked up from primary lead smelters. Some suppliers with limited cargoes refused to budge on prices, while others slightly expanded discounts. Mainstream region quotations were at discounts of 20 yuan/mt to premiums of 80 yuan/mt against the SMM #1 lead average price ex-factory. For secondary refined lead, production cuts and suspensions at smelters in major producing regions had not yet resumed, with relatively limited supply. Secondary refined lead quotations were at discounts of 20 yuan/mt to 75 yuan/mt against the SMM #1 lead average price ex-factory, almost in line with primary lead prices. Downstream enterprises only made purchases as needed. Due to price and transportation distance factors, just-in-time procurement slightly favored cargoes from nearby warehouses.

Inventory: As of August 18, LME lead inventory decreased by 625 mt to 260,475 mt. The total social inventory of lead ingots across five regions tracked by SMM reached 71,000 mt, an increase of 1,000 mt from August 11 and a decrease of approximately 800 mt from August 14.

Today's lead price forecast:

It is understood that after the completion of delivery for the SHFE lead 2508 contract last week, lead ingot cargoes re-entered the circulation market post-delivery this week. Some downstream enterprises made purchases as needed from nearby sources. Social warehouses for lead ingots shifted from premium to discount. However, the traditional peak season for the lead-acid battery market has not yet materialized. Downstream enterprises are basically making just-in-time procurement. On the supply side, some lead smelters are still in production cuts or suspensions, with the secondary lead sector being the majority. Regional supply differences still exist. The overall market is in a state of weak supply and demand, raising doubts about whether the subsequent social inventory of lead ingots can continue to decline. The short-term lead price trend is expected to continue consolidating.

Data Source Statement: Apart from public information, other data are derived from public information, market exchanges, and SMM's internal database model, processed by SMM for reference only and do not constitute decision-making advice.