Amid macro bearish sentiment, lead prices will be in the doldrums [SMM Lead Morning Briefing]

Futures:

Overnight, LME lead opened at $1,938/mt. Easing tensions in the Middle East, coupled with the US dollar index repeatedly hitting new highs, weighed on base metals. LME lead fell in a stepwise trend throughout the day, hitting an intraday low of $1,910/mt, its lowest level in nearly three months. Ultimately, LME lead settled at $1,913.5/mt, down 1.59%.

Overnight, the most-traded SHFE lead 2608 contract opened lower with a gap at 16,250 yuan/mt. In early trading, bulls added positions, attempting to push SHFE lead back above 16,300 yuan/mt, but macro-weak sentiment dominated, and SHFE lead slid again to an intraday low of 16,200 yuan/mt, a near two-week low, before closing at 16,205 yuan/mt, down 0.95%. Its open interest reached 84,650 lots, up 3,164 lots from the previous trading day.

On the macro front:

US President Trump pressured oil companies, demanding faster oil price declines or face a Department of Justice investigation. However, experts dismissed this as a mere "political show"—the gasoline pricing chain is complex, and retail prices lag crude oil changes by weeks. Meanwhile, improved navigation in the Strait of Hormuz may bring real supply relief. US Treasury Secretary Bessent: Iran negotiations include a dollar settlement requirement, and economic growth could return to 3% this year. All 32 banks passed the US Fed’s annual stress test, paving the way for dividends and buybacks.

:

Yesterday in the spot lead market, SHFE lead continued to consolidate. Suppliers' quotation premiums/discounts were unchanged from the previous day, and trading was thin in Jiangsu, Zhejiang, and Shanghai. EXW quotations from primary lead smelters saw further discounts, especially in south China, with mainstream producing area quotations at discounts of 100-0 yuan/mt against the SMM #1 lead average price, while some regions still held premiums of 100 yuan/mt. As for secondary lead, smelters showed low willingness to sell, with few quotations; some spot secondary refined lead was quoted around parity with the SMM #1 lead average price at the plant. Approaching month-end, downstream enterprises only made just-in-time procurement, with most waiting for new-month long-term contracts. Inquiries were scarce, and market trading was sluggish.

Inventories: As of June 24, LME lead inventory stood at 299,650 mt, down 1,000 mt from the previous trading day; total SHFE lead warrant inventory was 62,656 mt, down 50 mt from the previous trading day.

Lead price forecast today:

Recently, multiple macro events have dominated the direction of base metals. Expectations for US Fed interest rate hikes intensified, and the US dollar index hit new highs again. Advances in Middle East peace talks and a plunge in crude oil prices to some extent signaled lower smelting and transportation costs for metals, broadly weakening base metals. Lead prices have similarly been weighed down by macro bearish sentiment. Although tight raw material supply and production cuts of lead ingots still persist, their supportive effect on lead price movements has weakened. Going forward, lead prices will need to wait until the bearish market sentiment is fully vented before returning to fundamental logic. In the short term, lead prices will be in the doldrums.

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