Lead prices to fluctuate sideways this week

This week, the main macroeconomic data include the US June ISM Manufacturing PMI, US June ADP non-farm payrolls, US June unemployment rate, and US June seasonally-adjusted non-farm payrolls. Additionally, the US Fed will release the minutes of its monetary policy meeting, and China will update on the progress of environmental protection checks in some provinces and cities.

For LME lead, LME lead inventory decreased by 1,775 mt last week. The contango of LME 0-3 widened, reporting at $49.74/mt as of June 27. Recently, the Southeast Asian lead market consumption has been strong, while the strengthening US dollar has suppressed non-ferrous metals. LME lead is expected to consolidate at high levels, trading between $2,140-2,240/mt.

For SHFE lead, the tight supply on the scrap side still exists, and the profit of secondary lead is thin. The production enthusiasm of smelters is low. Before the resumption of secondary lead smelters, regional supply tightness will continue to keep lead prices strong. However, the import of crude lead will gradually arrive in China, which may ease the tight supply to a certain extent, and the room for lead price increase is expected to be limited. The most-traded SHFE lead contract is expected to trade between 18,750-19,550 yuan/mt this week.

Spot price forecast: 18,800-19,300 yuan/mt. For primary lead, some enterprises will complete maintenance in July, potentially increasing lead ingot supply, but the price difference between delivery and non-delivery brands will be hard to narrow. For secondary lead, thin profits and environmental factors still exist, and smelters' production enthusiasm is low. The price of secondary will continue to exceed primary lead prices. In July, the lead-acid battery market consumption is not expected to improve, and due to export difficulties, downstream enterprises will maintain a restock-as-needed mode.

According to the SMM model, the average price range for SMM 1# lead ingots is forecasted to be [18,595, 19,375], with an extreme price range of [18,180, 19,690], a normal price range of [18,460, 19,480], and a conservative price range of [18,730, 19,270]. The support range is [18,460, 18,730], and the resistance range is [19,270, 19,480].

The forecasted price range for the closing price of the most active SHFE lead contract is [18,790, 19,630], with an extreme price range of [18,430, 19,900], a normal price range of [18,670, 19,720], and a conservative price range of [18,910, 19,540]. The support range is [18,670, 18,910], and the resistance range is [19,540, 19,720].