SMM Morning Comment For Lead Market July 26

SHANGHAI, Jul 26 (SMM) – On Tuesday, LME lead opened at $2162.5/mt, with low at $2149/mt and high at $2181/mt, and finally closed at $2176.5/mt, up $ 11.5/mt, or 0.53%.

SHFE 2308 lead contract opened at 16055 yuan/mt at Tuesday’s night session. It fell to 15915 yuan/mt, but then rose above 16000 yuan/mt before closing at 16010 yuan/mt, down 105 yuan/mt or 0.65%.

On the macro level, market still needs to pay attention to the latest statement of the Federal Reserve meeting. The Chinese Political Bureau meeting analysed the current economic situation, proposed risk resolution in key areas (especially related to real estate), with focus on expansion of domestic demand. The performance of terminal demand has improved slightly. With the continuous rise of lead prices, the production costs of enterprises have also risen. Large lead-acid battery companies were able to raise production and battery selling prices, but small and medium-sized ones performed poorly. After the delivery of long-term orders on July 25, some lead-acid battery companies may slow down production if lead prices remain high. However, considering that the third quarter is in the peak season of lead consumption, the market still has expectations for future consumption. The current total open interest of SHFE lead has decreased by 6,050 lots to 175,000 lots, which is still at a historical high level. In the short term, it is still necessary to pay attention to the trend of bulls and the changes in spot discounts.

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