Futures:
The overnight LME lead 3M contract opened at $1,870/mt, then drifted lower in the initial session, dipping to $1,853/mt during the day before bearish pressure eased and futures rebounded. In the latter part of the evening session, the rally accelerated, with prices gradually climbing to a high of $1,881.5/mt. Towards the close, futures pulled back under modest pressure to settle at $1,866.5/mt, forming a long lower shadow candlestick and losing $5.5/mt, a decline of 0.29%.
The overnight SHFE lead 2608 contract opened at 15,895 yuan/mt. After a brief early spike to 15,930 yuan/mt, bulls lost momentum as bears entered to push prices lower, with the contract dropping to a low of 15,795 yuan/mt. Gaining some support from light buying at the lows, prices rebounded slightly and are now trading near 15,810 yuan/mt, down 65 yuan/mt, a decline of 0.41%. Trading volume expanded and open interest edged up by 1,263 lots, with the contract retreating after a rapid rise and showing overall weakness.
On the macro front:
Fed Chairman Warsh: Inflation expectations and inflation risks have both diminished in recent weeks. The US ADP employment change for June increased by less than expected. Warsh reportedly appointed a Bessent aide as a Fed advisor. Meta is reportedly considering selling surplus AI computing power. Wang Yi held a telephone call with US Secretary of State Rubio. An agent confirmed that MLCC giant Yageo raised prices.
Spot Fundamentals:
SHFE lead has recently suffered successive breakdowns, and losses widened again today, with suppliers holding prices firm on their cargoes—lead ingot cargoes in the Jiangsu, Zhejiang, and Shanghai regions were quoted at premiums. Meanwhile, the discount on EXW primary lead smelter cargoes narrowed. In major producing regions, quotations were near parity with the SMM #1 lead average price. For secondary lead, smelter losses deepened as lead prices fell, and some enterprises signaled potential production cuts or suspensions. Market quotes were scarce, with a few secondary refined lead offers at premiums of 0–75 yuan/mt against the SMM #1 lead average price. As the semi-annual liquidity squeeze eased in July, large downstream enterprises resumed normal procurement and showed marginally higher inquiry interest. However, given the sharp decline in lead prices, most downstream enterprises remained cautious, leaving market trading volumes subdued.
Inventories: As of July 1, LME lead inventory decreased by 1,900 mt to 301,775 mt. As of June 29, SMM data showed total social inventory of lead ingots across five major domestic regions climbed to 71,200 mt, reaching a stage high since June, with visible inventory buildup pressure remaining pronounced.
Lead Price Outlook Today:
LME lead inventory remains elevated, while Goldman Sachs continues to add short positions, and inflows of low-grade lead imports are weighing on SHFE lead. Supply side, lead concentrate availability is tight, with July TCs extending their decline; primary lead smelters resuming production after maintenance are expected to add 20,000 mt of output in July. Secondary lead raw material supply is tight, scrap battery prices fall, and production resumption plans are highly dependent on lead prices. In July, batteries enter the consumption off-season, with downstream only making small tentative purchases at low prices, and there is no concentrated restocking. Lead prices are in the doldrums in the short term, and a stop in their decline will require downstream concentrated purchasing and the implementation of secondary lead production cuts.
![[SMM Flash] ADNOC July Sulfur OSP Jumps to $1,000/mt, Hitting Record High](https://imgqn.smm.cn/usercenter/IHqPw20251217171709.jpg)
![LME inventory high and bearish pressure combined with domestic demand off-season, lead prices consolidate to find a bottom [SMM Lead Morning News]](https://imgqn.smm.cn/usercenter/mIbTL20251217171721.jpg)
