Spot Market Weakens, Lead Futures in the Doldrums [SMM Lead Morning Brief]

SMM July 7:

Overnight, LME lead opened at $1,892.5/mt, after briefly touching a high of $1,895.5/mt at the beginning of the session, it drifted lower; during the European session, bulls reduced their positions, and LME lead drifted lower, hitting a low of $1,878/mt in late trading, and finally closing at $1,881/mt, a decline of 0.37%.

Overnight, the most-traded SHFE lead 2608 contract opened at 15,905 yuan/mt, moved sideways around the 15,910 yuan/mt level, with an intraday high of 15,935 yuan/mt, and finally closed at 15,900 yuan/mt, up 0.03%.

Recently, lead prices continued to be in the doldrums, downstream enterprises bought the dip based on their needs, and cargo pick-up at some social warehouses increased, causing overall social warehouse inventory to turn lower. However, it is worth noting that the off-season trend in the lead-acid battery market remains unchanged, and downstream enterprises have limited rigid demand. Moreover, with the delivery of the SHFE lead 2607 contract approaching, suppliers have been shipping to delivery warehouses and moving inventories, and some social warehouses have risen for two consecutive weeks. In addition, this week both primary lead and secondary lead enterprises underwent maintenance. With only 7 working days until the SHFE lead delivery date and lead smelter inventories at high levels, it remains necessary to be vigilant about the impact on social inventory and lead prices.