Macro Weakness Coupled with Lead Ingot Inventory Buildup, Short-Term Lead Prices Will Continue to Consolidate on a Subdued Note [SMM Lead Morning Meeting Minutes]

Futures:

Overnight, LME lead opened at $1,866/mt, influenced by macro factors and lead ingot inventory buildup, LME lead drifted lower through the session. Notably entering the European session, LME lead inventory surged by another 86,000 mt, widening losses to a low of $1,840/mt, refreshing the low since April 9, 2025. Into the night session, some bears took profit, allowing LME lead to recover some losses and finally settled at $1,850.5/mt, down 0.86%.

Overnight, the most-traded SHFE lead 2608 contract opened at 15,510 yuan/mt. Under the dual pressure of simultaneous inventory buildups of lead ingots both in and outside China, SHFE lead continued to consolidate on a subdued note, hitting a low of 15,480 yuan/mt at the start, refreshing the low since December 13, 2023. In the latter half of the session, bearish news faded, and SHFE lead gradually rebounded to finally settle at 15,555 yuan/mt, down 0.61%. Open interest was 59,185 lots, up 121 lots from the previous trading session. In addition, open interest of the SHFE lead 2609 contract had increased to 113,000 lots, warranting attention to the contract rollover of the most-traded contract.

On the macro front:

PBOC: Strengthen counter-cyclical and cross-cyclical adjustments; the deceleration and quality improvement of loans may become a new norm in macro operations. China's June new social financing stood at 3.36 trillion yuan, new RMB loans were 1.61 trillion yuan, and M2 grew 8% YoY. China's Q2 GDP grew 4.3% YoY, with H1 up 4.7% YoY. June retail sales growth recovered to 1% YoY, H1 up 1.3% YoY; June industrial added value above designated size accelerated to 5.3% YoY. Additionally, Iran warned of retaliation for breach and refused to proactively seek negotiations; the US military resumed maritime blockade on Iran and launched new strikes, with Trump targeting the Fordow nuclear facility; the US may again move to suppress oil prices, and the White House is reportedly considering extending the "ship ban" exemption again.

:

In the lead spot market yesterday, the center of SHFE lead shifted further downward. Suppliers sold goods amid the market, and cargoes at parity or small discounts in Jiangsu, Zhejiang, Shanghai saw transactions. EXW quotes for cargoes from primary lead smelters narrowed their discounts, with some suppliers showing reluctance to sell at low prices. Quotes from main producing regions were at discounts of 25-0 yuan/mt against the SMM #1 lead average price ex-works. For secondary lead, smelters generally turned to a wait-and-see stance, market quotes dwindled, and a few secondary refined lead quotes were at discounts of 20-0 yuan/mt against SMM #1 lead ex-works. Downstream enterprises were cautious and bought little amid falling prices, but some still demonstrated dip-buying interest, with slightly improved inquiries. Spot order market transactions saw limited improvement.

Inventory: As of July 15, LME lead inventory stood at 456,575 mt, up 86,500 mt from the previous trading session. Total SHFE lead ingot warrant inventory was 65,913 mt, up 2,946 mt from the previous day.

Lead Price Forecast Today:

LME lead inventories outside China surged by a cumulative total of 167,200 mt over two consecutive days, as invisible inventories in the trading system turned into visible inventories, becoming a major bearish factor for the lead market recently. Lead prices in and outside China kept hitting new lows. In contrast, in China’s spot market, after the lead price decline, the trading mentality of upstream and downstream enterprises shifted. Some downstream enterprises bought the dip, but the situation of discount transactions in the spot market did not change. Going forward, the focus will be on the inventory change trends at lead smelters and in social warehouses.

Data Source Statement: Except for publicly disclosed information, all other data is processed by SMM based on public information, market communication, and SMM’s internal database models, and is for reference only. It does not constitute any decision-making advice.