Futures:
Last Friday, LME lead opened higher with a gap at $1,870.5/mt, drifted higher during the Asian session; after entering the European session, bulls added positions while bears exited, and LME lead hit a high of $1,898/mt. It moved sideways near the close and finally settled at $1,888/mt, up 1.04%.
Last Friday night, the most-traded SHFE lead 2608 contract opened at a low of 15,885 yuan/mt, moved sideways around the daily average line, with an intraday high of 15,965 yuan/mt, and finally closed at 15,930 yuan/mt, up 0.28%.
On the macro front:
ECB Governing Council member Mullan said that after last month's rate hike, inflation has pulled back with the plunge in crude oil prices, and the central bank is now in a favorable position. As tax revenue fell short of expectations, Germany plans to increase its borrowing target for 2027. Seven major OPEC+ oil-producing countries decided to increase crude oil production by 188,000 barrels per day on average in August. South Korea plans to use the tax dividends from the chip industry to set up a future fund to invest in economic growth engines and support the younger generation.
The National Development and Reform Commission (NDRC) issued the "15th Five-Year Plan for Circular Economy Development." In June, the RatingDog China Services PMI stood at 54.1, down 0.3 percentage points from May, in expansion territory for the 42nd consecutive month. Three departments: adjust the vehicle and vessel tax preferential policies for energy-saving vehicles and NEVs. Hon Hai: June sales were NT$821.8 billion, up 52.1% YoY.
Spot fundamentals:
After stopping falling, SHFE lead rebounded, and suppliers actively quoted and sold, but after the lead price rose, downstream enterprises engaged in more negotiations, resulting in stagnant deals. Meanwhile, quotations for EXW cargoes from primary lead smelters saw lower premiums/discounts, with mainstream producing areas offering at discounts of 25 yuan/mt to premiums of 25 yuan/mt against the SMM #1 lead average price. For secondary lead, some smelters were in reduced or suspended production, with limited circulating supply in the market. Some secondary refined lead was quoted at discounts of 25 yuan/mt to premiums of 50 yuan/mt against SMM #1 lead, and downstream customers' rigid demand shifted toward primary lead. Also, after prices rebounded, dip-buying interest waned, and market trading was sluggish.
Inventory: On July 3, LME lead inventory decreased by 1,300 mt to 293,150 mt; as of July 2, total social inventory of lead ingots across five regions tracked by SMM reached 72,500 mt, up 1,300 mt from June 29.
Today's lead price forecast:
Last week, amid a bearish fund frenzy, SHFE lead fell to a more than two-year low, causing widening losses for lead smelters and forcing secondary lead enterprises to reduce or suspend production again. Signs of bear exit then emerged, and lead prices stopped falling and rebounded. This week, we need to watch downstream enterprises' purchasing dynamics. If lead ingot destocking materializes, lead prices may continue to rebound; otherwise, vigilance is needed against the bears that have not yet exited.
![Last Friday, bulls added positions while bears exited, LME lead rose 1.04% [SMM Lead Morning Brief]](https://imgqn.smm.cn/usercenter/xVUpr20251217171722.jpg)
![SHFE Lead 2608 Closes with a Small Gain, Ending the Four-Day Losing Streak; Market in the Doldrums with Support at the Bottom [Lead Futures Review]](https://imgqn.smm.cn/usercenter/hrxHx20251217171721.jpeg)
