Futures:
Overnight, LME lead opened at $1,887.5/mt. During the Asian session, it rose before declining, with the session high of $1,888.5/mt. After entering the European session, bears added positions, and LME lead drifted lower to a low of $1,871/mt. Late in the session, some bears took profits and exited, leading to a slight recovery in LME lead, which finally settled at $1,877/mt, down 0.53%.
Overnight, the most-traded SHFE lead 2609 contract opened at 15,840 yuan/mt. After briefly touching a low of 15,790 yuan/mt early in the session, it rebounded as bears reduced positions. Late in the session, it reached a high of 15,900 yuan/mt, and finally settled at 15,895 yuan/mt, up 0.54%.
Macro front:
On Monday, as investors weighed conflicting developments in the US-Iran conflict, the US dollar index fell before rising. The US announced 50% tariffs on some Canadian products, which do not apply to energy products, potash, fish and critical minerals. The Houthis announced a naval embargo on Saudi Arabia. Saudi Arabia stated that it is taking necessary military actions to ensure shipping safety in the Bab el-Mandeb Strait.
HKEX: The current priority is to study the proposal to extend trading hours for the derivatives market, rather than stock trading hours. Foreign Ministry: China and the US are maintaining communication on arrangements for the interaction of the heads of state this year. MIIT: will issue a guide on computing power standard system construction, and promote the establishment of standards such as market-based pricing for computing power.
Spot fundamentals:
SHFE lead consolidated, with suppliers holding prices firm while selling, and most quotations were at premiums. Meanwhile, primary lead smelters had ample cargoes self-picked up from production site, and quotation discounts widened. In mainstream production areas, quotations against the SMM #1 lead average price were at discounts of 50–0 yuan/mt ex-works, with some at discounts of 80–60 yuan/mt. In the secondary lead market, circulating cargoes were limited. Some smelters held prices firm while selling, and secondary refined lead quotations against SMM #1 lead were at discounts of 25–0 yuan/mt ex-works. Downstream enterprises showed strong wait-and-see sentiment, with few inquiries, and mainly purchased under long-term contracts. The spot order market saw sluggish transactions.
Inventory side: On July 20, LME lead inventory decreased by 300 mt to 451,775 mt. As of July 20, total social inventory of SMM lead ingots across five regions decreased by 8,000 mt WoW from July 16.
Today’s lead price forecast:
Delivered cargoes re-entered the circulation market this week, and downstream enterprises picked up more goods, especially at warehouses close to consumption areas where inventory declines were more noticeable. However, the lead-acid battery market remains in an off-season trend, and with frequent high-temperature weather, some medium and large lead-acid battery enterprises plan to cut production and take holidays, resulting in insufficient lead consumption momentum. Moreover, after dipping lower, lead prices rebounded, dampening downstream enterprises’ purchasing enthusiasm. At the start of the week, spot lead market transactions were sluggish, limiting the rebound momentum of lead prices.
![In the near term, SHFE lead will move sideways, while China focuses on secondary lead production resumptions and changes in downstream operating rates. [Lead Futures Brief Comment]](https://imgqn.smm.cn/usercenter/qnyHQ20251217171721.jpeg)
