Bears Reduced Positions, Lead Prices Closed Higher on Both Markets Last Friday [SMM Lead Morning Brief]

SMM May 25:

Last Friday, LME lead opened at $2,005/mt and moved sideways during the Asian session. Entering the European session, it first dipped then rallied. After touching a low of $1,995/mt, bears reduced positions, and LME lead reached a high of $2,015/mt near the close, ultimately settling at $2,013/mt, up 0.4%.

Last Friday evening, the most-traded SHFE lead 2607 contract opened at 16,735 yuan/mt, briefly touched a high of 16,780 yuan/mt at the start of the session before moving sideways, and ultimately settled at 16,775 yuan/mt, up 0.24%.

The decline in lead futures prices spurred some downstream stocking demand on dips. Combined with reduced lead imports, this contributed to lead ingot destocking and supported lead prices to rebound after touching lows. Meanwhile, secondary lead enterprises successively resumed production, and secondary refined lead transaction prices shifted to a discount (against the SMM #1 lead average price). The incremental supply put pressure on the sustainability of subsequent lead ingot destocking, limiting upside room for lead prices.

Data source disclaimer: Data other than publicly available information is derived by SMM based on public information, market communication, and SMM's internal database models, and is for reference only and does not constitute decision-making advice.