Stalemate Persists Amid Dual Supply-Demand Weakness, Limited Upward Momentum for Lead Prices [SMM Lead Morning Briefing]

Futures:

Overnight, LME lead opened at $1,889/mt, with sluggish trading in the Asian session, consolidating mostly between $1,886-1,892/mt. In the European session, bulls added positions, lifting LME lead higher and pushing it past the $1,900/mt mark, hitting an intraday high of $1,913.5/mt, the highest in nearly a month. Late in the night, some bulls took profits, and LME lead gradually pared the day’s gains, eventually settling at $1,897/mt, up 0.61%.

Overnight, the most-traded SHFE lead 2609 contract opened higher at 15,850 yuan/mt, briefly surging to 15,870 yuan/mt, but failing to hold above the 20-day moving average. In the latter half of the session, SHFE lead gradually pulled back to hover around 15,715 yuan/mt, eventually closing at 15,730 yuan/mt, up 0.06%; open interest was 85,881 lots, an increase of 1,517 lots from the previous trading day.

Macro front:

US President Trump repeatedly warned of a "heavy punch" against Iran, seeking to impose additional tariffs on Iran. The US escalated sanctions on Iran, targeting for the first time the Strait of Hormuz “toll network,” blacklisting tankers, shipping firms, and insurers. Joint US-Saudi airstrikes hit Iraq, further expanding the Middle Eastern front. Meanwhile, the US Fed kept interest rates on hold, reaffirming its commitment to inflation, but three voters supported a rate hike. Walsh: The 2% inflation target is unwavering, maintaining independence, and focusing on AI transformation. "New Fed Wire": For the first time since 2016, three voters cast dissenting votes in the same direction on a policy adjustment.

:

In the spot lead market yesterday, SHFE lead consolidated higher, with suppliers showing divergent selling attitudes. Smelters held back from selling at low prices, while traders continued to sell at discounts. Quotations from mainstream producing areas were mostly at parity against the SMM #1 lead average price, with a few at discounts of 50 yuan/mt or premiums of 80 yuan/mt. For secondary lead, only some secondary lead smelters maintained normal shipments, with secondary refined lead quoted at discounts of 50-0 yuan/mt against the SMM #1 lead average price. Downstream enterprises reported that battery orders remained weak, with purchases still dominated by long-term contracts, while restocking demand for spot orders was limited, leaving the spot market persistently sluggish.

Inventories: As of July 29, LME lead inventory stood at 447,200 mt, down 550 mt from the previous trading day; SHFE lead ingot warrant inventory totaled 57,578 mt, down 24 mt from the previous trading day.

Today’s lead price forecast:

The US Fed’s July rate decision left rates unchanged, weakening the US dollar index, and sending base metals broadly into positive territory. Recently, lead prices continued to consolidate on a subdued note, and upstream and downstream enterprises were in a stalemate in purchasing and sales. Supply side, primary lead and secondary lead enterprises underwent maintenance and production cuts simultaneously, with strong sentiment of holding back from selling at low prices. Circulating goods in the market decreased, and spot discounts narrowed, providing some support for lead prices. Demand side, the traditional peak season for the lead-acid battery market showed no significant improvement for now. Downstream enterprises were mostly in a state of production cuts and holidays, with low procurement enthusiasm for lead ingots, resulting in thin market trading and limited support for lead prices.

Data Source Statement: Data other than public information is based on public information and market communication, processed by SMM relying on SMM's internal database models, and is for reference only, not constituting any decision-making advice.