Geopolitics and Off-Season Demand Weigh, Lead Prices See Short-Term Fluctuations Amid Supply Game [SMM Lead Morning Comment]

SMM, June 12:

Overnight, the LME lead 3M contract opened at $1,960/mt. Initially, the price briefly fluctuated upward, hitting a high of $1,974/mt. Then the bulls' upward momentum faded and the price fluctuated downward. During the European session, it continued to fluctuate downward, hitting a low of $1,942/mt. At the end of the session, the price rebounded quickly, finally settling at $1,957.5/mt, forming a small bearish candlestick, down $5/mt, or 0.25%.

Overnight, the SHFE lead 2607 contract opened lower with a gap at 16,135 yuan/mt. As bears entered, the SHFE lead price fluctuated downward from early to mid-session, hitting a low of 16,000 yuan/mt. Near the end of the session, it rebounded slightly and lifted, finally settling at 16,040 yuan/mt, forming a small bearish candlestick, down 180 yuan/mt, or 1.11%.

Middle East geopolitical conflicts weakened overseas consumption and export expectations. LME lead inventories remained at multi-year highs, with ex-China lead prices under pressure, dragging on the Chinese market. Currently, downstream has entered the consumption off-season, battery enterprises are conducting half-year inventory checks, and later-stage procurement tends to contract, making it difficult for the demand side to lift prices. Supply side, some secondary lead smelters plan to cut production due to losses, while some primary lead smelters are in maintenance, coupled with production resumption expectations at some secondary lead smelters. Supply-side bullish and bearish factors are intertwined, and lead prices are expected to fluctuate in the near term.