Futures:
Last Friday, the LME lead 3M contract opened at $2,015/mt, edged down slightly during Asian hours, then moved sideways in a narrow range of $2,006.5-2,012/mt; in the European session, it gradually strengthened on fund buying, touching a high of $2,018.5/mt, but met significant overhead resistance, pulled back toward the close, dipped to $1,999/mt, and finally settled at $1,995/mt.
Last Friday night, the most-traded SHFE lead 2606 contract opened at 16,380 yuan/mt, briefly surged to 16,455 yuan/mt in early trading before coming under pressure and pulling back. It then fluctuated downward, breaking below the daily average line support, hitting a low of 16,365 yuan/mt, and finally settled at 16,405 yuan/mt, ending as a small bearish candlestick, down 30 yuan/mt or 0.18%.
On the macro front:
Israel launched airstrikes on Beirut’s southern suburbs, Iran responded with missile attacks, and Trump urgently intervened. US May non-farm payrolls increased by a stronger-than-expected 172,000, and the market fully priced in a 25bp rate hike by the Fed before year-end. Trump: There is no reason for the Fed to raise rates; the jobs report is very strong, stocks should go up, and economic growth does not mean inflation. Iran denied that it had agreed to transfer some enriched uranium to a third country. OPEC+ seven countries will raise production targets by 188,000 barrels per day from July. Putin rejected Zelenskiy’s “talks” proposal, saying it was meaningless. Sources: The US government is considering taking stakes in AI companies. The PBOC increased its gold reserves for the 19th straight month, up 320,000 ounces MoM. CSRC Chairman Wu Qing: Resolutely curb pseudo-innovations such as concept hype, complex nesting, excessive speculation, and channel arbitrage.
Spot fundamentals:
Last Friday, SHFE lead remained weak. Suppliers showed divergent selling attitudes, with some halting shipments, some selling at market, and some holding prices firm. Primary lead smelter cargoes self-picked up from production site were quoted at premiums of 0-25 yuan/mt against the SMM #1 lead average price, with ultra-high premiums (against SMM #1 lead) being lowered or shifting from discounts to premiums. In secondary lead, smelters’ losses widened, and most refrained from selling at low prices, with some secondary refined lead quotations at premiums of 0-75 yuan/mt against SMM #1 lead ex-works. Meanwhile, downstream enterprises continued dip-buying on a need-to basis, but limited rigid demand meant purchasing enthusiasm weakened compared with the previous sharp price decline.
Inventories: On June 5, LME lead inventory fell by 2,175 mt to 310,350 mt; as of June 4, SMM lead ingot social inventory across five regions totaled 67,100 mt, down 1,200 mt from May 28, and up about 300 mt from June 1.
Lead price outlook today:
Recently, primary and secondary lead enterprises in Henan, Anhui and other regions have concentrated production resumptions, significantly increasing lead ingot supply. However, downstream consumption recovery is slow, enterprises’ purchase willingness is weak, and combined with the off-season and high temperatures, some downstream enterprises plan to suspend production for holidays, further weakening the consumption side. But as lead prices declined, scrap battery prices experienced relatively limited declines due to tight supply, leading to widening losses for secondary lead enterprises, while the cost side still provided some support for lead prices.
![Lead prices encountered significant resistance, and both SHFE and LME retreated after a rapid rise overnight [SMM Lead Morning Report]](https://imgqn.smm.cn/usercenter/lIHfM20251217171721.jpeg)
![Macro Weakness and Divergent Domestic and Overseas Fundamentals: LME Lead Prices Expected to Continue Outperforming SHFE [SMM Weekly Lead Market Forecast]](https://imgqn.smm.cn/usercenter/TmYox20251217171721.jpeg)