Lead Prices Give Back Most Gains, SHFE Lead Closes Lower Overnight [SMM Lead Morning News]

SMM August 6 news:

Overnight, LME lead opened at $1,893/mt, drifted higher to $1,907.5/mt during Asian trading hours before weakening. Entering the European session, it gave back most gains and dipped to $1,883.5/mt, eventually closing at $1,890/mt, flat from the previous close.

Overnight, the most-traded SHFE lead 2609 contract opened at 15,735 yuan/mt, briefly touched a high of 15,745 yuan/mt then drifted lower. Bulls reduced positions, pushing the contract to a low of 15,600 yuan/mt in late trading, and it finally settled at 15,640 yuan/mt, down 0.73%.

Supply side, primary lead smelters saw additional maintenance in August, with production expected to decline. Secondary lead output also has a downside expectation, but attention should be paid to the recovery in lead prices lifting smelter production enthusiasm, with some enterprises likely to resume production ahead of schedule. Moreover, lead ingot social inventory is staying high, and we need to be wary of the pullback risk from suppliers moving ingots out of warehouses before delivery. Overall domestic consumption was neutral: demand in the e-bike segment was conservative and relatively stable from July to August; auto sector demand was mixed, with enterprises handling export orders performing well, while those serving the domestic market underperformed. In summary, the exit of bears has led to a short-term rebound in lead prices to catch up, but the consumption picture will determine how much room this rebound has.