Overseas Inventories Surge by Over 20,000 mt, Domestic and Overseas Lead Prices Generally Weaken [SMM Lead Morning Meeting Summary]

Futures:

Overnight, LME lead opened at $1,977/mt. During the Asian session, as the US dollar index weakened, LME lead fluctuated upward and approached $1,990/mt. However, entering the European session, LME lead gave back most of its gains. Especially after LME lead inventory surged by over 20,000 mt, the center of LME lead's price movement shifted further downward, reaching a low of $1,967.5/mt, hitting a new two-week low. It eventually closed at $1,974/mt, down 0.33%.

Overnight, the most-traded SHFE lead 2509 contract opened at 16,825 yuan/mt. Dragged down by the decline in LME lead, SHFE lead fell rapidly after the opening, reaching a low of 16,680 yuan/mt, a two-week low. In the latter half, the tug-of-war between longs and shorts intensified, with SHFE lead basically consolidating between 16,685-16,700 yuan/mt until it finally closed at 16,695 yuan/mt, down 0.68%. Its open interest reached 48,632 lots, an increase of 520 lots from the previous trading day.

Macro:

The foreign ministers of China and India reached 10 outcomes during their talks. The special representatives for the China-India boundary issue reached 10 points of consensus. The US Department of Commerce officially announced on Tuesday that it would add 407 categories of steel and aluminum derivative products, including wind turbines, to the tariff list. Trump's steel and aluminum tariff scope expanded sharply, catching US importers off guard. Despite Trump's tariff exemption, US Copper Corp still announced a price increase.

:

In the lead spot market yesterday, SHFE lead continued to consolidate. Suppliers were mostly active in selling, with small discounts in the Jiangsu, Zhejiang, and Shanghai regions. Quotations were at a discount of 30-0 yuan/mt against the SHFE lead 2509 contract. Meanwhile, there was also a flow of goods from northern warehouses, while downstream enterprises' procurement enthusiasm was generally moderate, with most enterprises making just-in-time procurement. Recently, due to the upcoming SCO Summit and the commemorative activities for the victory of the War of Resistance Against Japanese Aggression, some areas in North China will enter a temporary vehicle control status. To avoid transportation impacts, some lead smelters have accelerated the shipment and delivery of lead ingots, with quotations at a discount of 50 yuan/mt to a premium of 50 yuan/mt against the SMM #1 lead average price in the mainstream regions. For secondary lead, smelters' shipping enthusiasm was generally moderate, with secondary refined lead quotations at a discount of 20 yuan/mt to 75 yuan/mt against the SMM #1 lead average price.

Inventory: As of August 19, LME lead inventory surged by 22,475 mt to 282,950 mt. The total SHFE lead ingot warrant inventory was 61,353 mt, a decrease of 872 mt from the previous day.

Today's lead price forecast:

Yesterday, overseas lead inventory surged by over 20,000 mt, with lead prices weakening both domestically and overseas. Currently, the domestic lead-acid battery market is in its traditional peak season, but actual terminal consumption improvement is limited. Additionally, tariff policy changes have dragged down battery exports, providing limited support for lead consumption. At the same time, the issue of losses for secondary lead has not improved, with most secondary lead enterprises in a state of reduced or halted production. The price of secondary lead continues to be lower than that of primary lead. Going forward, continued attention should be paid to the supportiveness of secondary lead costs and downstream purchasing trends on lead prices.

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