Import and Export Data Offset Each Other, Short-Term Lead Prices May Stop Falling and Stabilize [SMM Lead Morning Meeting Summary]

Futures:

Overnight, LME lead opened at $1,972.5/mt. During the Asian session, LME lead was in the doldrums, fluctuating between $1,965-1,970/mt, with the lowest point reaching $1,965/mt, refreshing a two-week low. Entering the European session, the US dollar index rose and then pulled back, allowing LME lead to stop falling and rebound, regaining the $1,980 level, and finally closing at $1,980/mt, up 0.33%, largely recovering the losses from the previous trading day.

Overnight, the most-traded SHFE lead 2509 contract opened at 16,770 yuan/mt. The decline in SHFE lead warrant inventory alleviated market bearish sentiment, while secondary lead cost support remained strong. SHFE lead gradually stopped falling and rebounded, approaching 16,800 yuan/mt, and finally closed at 16,780 yuan/mt, up 0.3%. Open interest reached 46,592 lots, down 184 lots from the previous trading day.

Macro:

China's August LPR quotes remained unchanged: the over-five-year LPR at 3.5% and the one-year LPR at 3%. The minutes of the US Fed's July meeting indicated that most participants viewed inflation as a higher risk than employment, signaling a hawkish stance. Several members noted that the impact of tariffs might take time to fully materialize, expressed concern about the fragility of the US Treasury market, and paid attention to the influence of stablecoins. Trump continued to pressure the Fed, calling for the immediate resignation of Fed Governor Lisa Cook, who was accused of mortgage fraud; Cook responded that she would not be coerced into resigning.

In the lead spot market yesterday, the center of SHFE lead shifted lower. Some suppliers narrowed their discount offers, showing increased reluctance to sell at low prices, with quotations in Jiangsu, Zhejiang, Shanghai against the SHFE 2509 contract at -30~0 yuan/mt. Disagreements among electrolytic lead smelters on cargo pick-up widened, with some focusing on shipments under long-term contracts, while others, considering expected month-end transportation restrictions, expedited deliveries this week. Suppliers also expanded discounts, with mainstream region quotations against the SMM #1 lead average price at -50~0 yuan/mt ex-works. In the secondary refined lead sector, weakening lead prices exacerbated losses, leading some producers to suspend sales. Quotations for secondary refined lead were -30~50 yuan/mt against the SMM #1 lead average price ex-works.

Inventory: As of August 20, LME lead inventory decreased by 1,850 mt to 281,100 mt. SHFE lead warrant inventory totaled 60,903 mt, down 450 mt from the previous day.

Today's lead price forecast:

Recently, the General Administration of Customs has successively released July import and export data, which showed lead-acid battery exports at 21.2866 million units, up 13.56% MoM, boosting lead consumption. Meanwhile, the total imports of refined lead and lead materials in July were 16,300 mt, up 42.10% MoM. Both imports and exports increased, with the supply-demand pattern of the lead ingot market relatively balanced. In addition, the recent decline in lead prices has further widened the losses for secondary lead enterprises, dampening their enthusiasm for production and shipments. The inverted price relationship between secondary and primary lead may play a supportive role, leading to expectations that lead prices will stop falling and stabilize.

Data Source Statement: Apart from publicly available 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.