Post-Holiday Lead Ingot Social Inventory Accumulation, Mid-Year Repayment Suppresses Demand [Lead Futures Brief Comment]

SMM June 23:

The most-traded SHFE lead 2608 contract opened at 16,420 yuan/mt during the day. In the morning session, prices fluctuated slightly around the intraday moving average, then weakened and fluctuated downward, dipping to an intraday low of 16,315 yuan/mt. In the afternoon, futures gradually recovered and rebounded, with prices steadily approaching the average line. Near the end of the session, the contract moved sideways in a narrow range of 16,370–16,400 yuan/mt and finally settled at 16,385 yuan/mt, recording a small bearish candlestick, down 65 yuan/mt or 0.4%. The SHFE lead 2607 contract recorded a trading volume of 29,824 lots and open interest of 43,541 lots. The SHFE lead 2608 contract recorded a trading volume of 31,280 lots and open interest of 69,530 lots. The most-traded SHFE lead contract officially rolled over to the 2608 contract. Currently, primary and secondary lead smelters in China are entering a concentrated maintenance period, creating strong market expectations of a contraction in lead raw material supply, which provides upward support to the futures market. After the Dragon Boat Festival holiday, downstream battery factories have gradually resumed production, generating short-term restocking demand driven by rigid needs. However, at the mid-year period, large downstream battery enterprises are entering the semi-annual financial closing and inventory check phase, which will temporarily slow down their concentrated procurement of lead ingots. The bullish impetus from rigid demand is relatively limited. The weak supply-demand situation makes it difficult to persistently boost lead prices upward. Lead prices are expected to remain in the doldrums in the short term.

Data source statement: All data, except publicly available information, are processed by SMM based on public information, market communications, and SMM's internal database models. They are for reference only and do not constitute investment advice.