Supply Tightens and Consumption Weakens, Lead Prices Expected to Continue Consolidating Next Week [SMM Weekly Lead Market Forecast]

         Next Monday (September 1) marks the US Labor Day, with exchanges including the NYSE closed for the day. Tuesday is Vietnam's Independence Day, and the Ho Chi Minh Stock Exchange will also suspend trading. Key macro data releases include the US August ISM Manufacturing PMI, ADP employment figures, unemployment rate, and seasonally adjusted nonfarm payrolls. Recent market expectations for a US Fed interest rate cut in September have intensified, with key officials strongly supporting a 25-basis-point reduction.

For LME lead, overseas fundamentals remain subdued. Although LME lead inventories have declined, the LME lead cash-3M contango remains wide, hovering around -$40/mt. Additionally, heightened expectations for a US Fed rate cut in September and a weaker US dollar index may provide some support for lead prices. LME lead is expected to trade between $1,975-2,010/mt next week.

Domestically, SHFE lead enters September with increased maintenance at primary and secondary lead smelters, coupled with unresolved raw material supply constraints. Lead concentrate TCs have fallen further, and anticipated supply reductions may bolster lead prices to hold up well. However, attention should be paid to the lifting of logistics restrictions in North China following the Tianjin SCO Summit and Beijing military parade, which could increase spot market supply. Given current mediocre lead consumption, short-term downward pressure on prices cannot be ruled out. The most-traded SHFE lead contract is projected to trade between 16,750-16,950 yuan/mt next week.

Spot price forecast: 16,600-16,850 yuan/mt. For primary lead, the lifting of transport restrictions in North China is expected to boost spot market supply, with transactions likely to remain at a discount. Secondary lead smelters face growing maintenance impacts and persistent losses, maintaining their refusal to budge on prices. Some regions may continue to see price inversions (secondary lead above primary lead). On the demand side, lead-acid battery markets remain sluggish, with producers adopting a produce-based-on-sales approach and purchasing raw materials only as needed, offering limited support for lead prices.