Futures:
Overnight, LME lead opened at $2,000/mt and swung wildly during the Asian session. Entering the European session, it first declined then rose, dipping to a low of $1,990.5/mt before bears reduced positions. LME lead rallied toward the close, touching a high of $2,022/mt and ultimately settling at $2,019/mt, up 0.9%.
Overnight, the most-traded SHFE lead 2607 contract opened lower with a gap at 16,560 yuan/mt. It initially fell to a low of 16,505 yuan/mt before rebounding with fluctuations, touching a high of 16,595 yuan/mt toward the close and ultimately settling at 16,570 yuan/mt, down 0.15%.
On the macro front:
ECB meeting minutes showed that several members were not opposed to a rate hike. Zimbabwe announced that 14 minerals including lithium and nickel were designated as "critical minerals," with mandatory state equity participation. The US April core PCE price index rose further to 3.3% YoY, the highest level since November 2023, in line with market expectations. China's Ministry of Commerce stated that export control measures against Japan were entirely justified, reasonable, and lawful. The NDRC convened a video conference to arrange and deploy nationwide energy supply assurance work for the summer peak season. The Ministry of Commerce responded to the EU's plan to impose additional tariffs on imported steel, stating that negotiations with the EU were underway and a win-win outcome is expected. The Ministry of Commerce responded to the progress of China-US tariff negotiations, stating that the economic and trade teams of both sides will agree on specific arrangements and push for implementation as soon as possible.
:
Circulating supplies in the Jiangsu, Zhejiang, Shanghai market were limited, with few suppliers offering quotations. The macro atmosphere was weak, with non-ferrous metals generally in negative territory, and SHFE lead also reversed course and pulled back. Some suppliers narrowed their quoted discounts (against the most-traded SHFE lead contract) for shipments. Primary lead from major producing regions was quoted at premiums of 0-50 yuan/mt against the SMM #1 lead average price on an ex-factory basis. Secondary lead smelters increasingly held back from selling at low prices, with some adopting a wait-and-see stance and suspending quotations while others held prices firm for shipments. Secondary refined lead was quoted at discounts of 50 yuan/mt to premiums of 50 yuan/mt against SMM #1 lead on an ex-factory basis. Wait-and-see sentiment among downstream enterprises was strong. Some enterprises intended to purchase on dips as needed, with inquiries increasing relatively. Some rigid demand was diverted to lower-priced secondary lead sources, and spot market transactions were moderate. In terms of inventory: on May 28, LME lead inventory surged by 29,700 mt (all from Kaohsiung warehouses) to 314,000 mt. As of May 28, total SMM lead ingot social inventory across five regions decreased by 1,700 mt compared with May 24.
Lead Price Forecast for Today:
This week, some primary lead smelters in Henan and Hunan were under maintenance, tightening regional lead ingot supply. Meanwhile, downstream enterprises picked up goods in the first half of the week, contributing to a declining trend in lead ingot social warehouse inventory. Recently, secondary lead smelters in east China have gradually resumed production, and the regional supply gap of secondary lead has been progressively repaired. Secondary lead production is expected to shift to an upward trend in June. Meanwhile, consumption in the lead-acid battery market has been weak, with producers showing limited rigid demand for lead ingots. In particular, the spread between lead futures and spot prices widened to 200 yuan/mt during the week, prompting some suppliers to transfer inventory and ship to delivery warehouses. Next week, we need to pay more attention to the pressure on lead prices from inventory buildup risks brought by the resumption of production at smelters as the new month begins.
Data source disclaimer: Apart from publicly available information, all other data are processed by SMM based on public information, market communication, and SMM's internal database model. They are for reference only and do not constitute decision-making advice.
![Rising China Supply Combined with Ex-China Inventories at 13-Year High Limits Upside Momentum for Lead Prices [SMM Lead Market Weekly Forecast]](https://imgqn.smm.cn/usercenter/msNEk20251217171722.jpg)
![Intraday lead prices edged up before fluctuating and pulling back, eventually closing with a doji [Lead Futures Brief]](https://imgqn.smm.cn/usercenter/qnyHQ20251217171721.jpeg)
