Lead Price Decline Continues, SHFE and LME Close Lower in Tandem [SMM Lead Morning Meeting Summary]

Futures:

Overnight, the LME lead 3M contract opened at $1,981/mt. At the start of the session, prices were at intraday highs, then came under pressure and began a pullback. During the Asian session, it fluctuated downward with the price center gradually shifting lower. Entering the European session, bulls struggled to rebound, selling pressure above mounted, and the market continued to fluctuate downward. It dipped to the intraday low of $1,960/mt. Near the close, it stabilized slightly, finally settling at $1,962.5/mt, recording a small bearish candlestick, down $18.5/mt or 0.93%.

Overnight, the SHFE lead 2607 contract opened at 16,115 yuan/mt. Initially, prices briefly rose to an intraday high of 16,140 yuan/mt before the bulls lost momentum. The market then fluctuated downward overall, with prices gradually pulling back, dipping to 16,060 yuan/mt. Near the close, it rebounded slightly, finally settling at 16,100 yuan/mt, recording six consecutive bearish candles, down 30 yuan/mt or 0.19%.

On the macro front:

The US military confirmed a second consecutive day of strikes against Iran. Trump: The deal is done, and now only requires Iran's signature on the documents. Iran will be given a few more days to consider. US media report that two additional demands from Trump caused the delay. US May CPI rose to a three-year high YoY. Trump commented: I love inflation. BOJ Governor Ueda will miss next week's rate decision due to hospitalization. Bureau of Statistics: May consumer prices rose 1.2% YoY. Hong Kong SFC: Hong Kong-licensed companies can continue to serve existing mainland clients, but cannot offer services in mainland China.

Spot fundamentals:

SHFE lead remained in the doldrums. Suppliers were not keen on selling. Some suppliers, considering semi-annual fund repatriation, quoted and sold as usual, and a few even offered at wider discounts. Most electrolytic lead from mainstream regions was quoted at parity with the SMM #1 lead average price at factory. For secondary lead, smelters either suspended quotations or held prices firm. Some secondary refined lead was quoted at premiums of 0-50 yuan/mt over SMM #1 lead at factory, continuing to be inverted with primary lead. Downstream enterprises bought the dip as needed, but with strong risk-aversion sentiment, purchases were scattered and in small volumes.

Inventory side: As of June 10, LME lead inventory decreased by 825 mt to 307,225 mt. As of June 8, total social inventory of lead ingots in five regions reached 64,700 mt, down 2,100 mt from June 1 and 2,400 mt from June 4.

Lead price forecast today:

Sentiment-wise, geopolitical tensions flared up again, broadly weighing on the non-ferrous metals sector. Demand side, end-use consumption recovery is not as strong as peak season expectations, and downstream enterprises maintain a cautious purchasing sentiment. Inventory side, LME lead and China lead ingot inventories continue to pull back, forming bottom support for lead prices; coupled with secondary lead smelters holding prices firm and holding back from selling due to cost constraints, further underpinning lead prices. Currently, in east China, secondary lead enterprises are experiencing both production suspensions and resumptions, with bullish and bearish factors intertwined in the market. Short-term lead prices are expected to maintain a fluctuating trend.