Tug-of-war Between Longs and Shorts Intensifies, SHFE Lead Declines Then Rises [Lead Futures Brief]

SMM August 22 News:

The most-traded SHFE lead 2509 contract opened at 16,790 yuan/mt, fluctuated downward to a low of 16,730 yuan/mt after the opening. A tug-of-war between longs and shorts was intense, with SHFE lead slightly rebounding in the afternoon, finally closing at 16,780 yuan/mt, up 0.21%, with an open interest of 41,165 lots.

Deliverable cargoes re-entered the market this week, leading to relatively loose supply of spot lead ingots, with more transactions at a discount for primary lead. Meanwhile, in Anhui, the main production area for secondary lead, many smelters were in a state of reduced or halted production, resulting in regional tightness in lead ingot supply. Coupled with losses, the price of secondary lead inverted compared to primary lead, prompting downstream enterprises to favor purchasing primary lead. Especially when lead prices fell this week, some downstream enterprises purchased as needed and accepted some nearby warehouse supplies, further reducing social inventory of lead ingots. Currently, due to vehicle restrictions on certain roads in Tianjin for the SCO summit, and with Henan and other regions entering a period of vehicle transportation control after August 23, it may affect the entry and exit of lead ingots from some warehouses, which could impact lead price trends.

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