Lead Prices Continue Weak Trend, SHFE and LME Both Under Pressure [SMM Lead Morning News]

SMM, June 9 –

Overnight, the LME lead 3M contract opened at $1,991/mt, briefly rallied to $1,992/mt (highest price) during the Asian session, then came under pressure and pulled back. In the European session, prices staged a modest recovery but faced notable resistance, fluctuating downward again to a low of $1,987.5/mt before closing at $1,988/mt, edging down $0.5/mt, or 0.03%, from the previous trading day. Overnight, the most-traded SHFE lead 2607 contract opened at 16,300 yuan/mt, then fluctuated downward under pressure, falling to a low of 16,155 yuan/mt. It subsequently rebounded slightly and moved sideways in a range of 16,170-16,205 yuan/mt, eventually closing at 16,180 yuan/mt, posting a four-day losing streak, down 160 yuan/mt, or 0.98%.

Recently, the operating rate at secondary lead smelters has rebounded, and as primary lead producers resume production after maintenance, the supply of lead ingots has continued to expand, with June production expected to turn from a decline to an increase. However, the downstream lead-acid battery market is in its traditional off-season, with enterprises mainly making just-in-time procurement, and consumption remains sluggish. Meanwhile, as the delivery date approaches, invisible inventory is shifting to visible inventory, making inventory buildup pressure more evident. From the cost side, against the backdrop of weakening lead prices, secondary lead enterprises have proactively lowered their procurement prices for scrap batteries, weakening the level of support somewhat. Still, scrap battery raw materials provide a floor of support, and together with smelters’ strong reluctance to sell at low prices amid expanding secondary lead losses, this continues to offer a degree of underpinning for lead prices, limiting room for deep price declines.