[SMM Lead Morning Meeting Minutes: Inventory Buildup Ahead of Lead Ingot Delivery, Supply-Side Increases and Decreases Coexist, Limiting Upside in Lead Prices] US July PPI YoY growth narrowed to 4.7%, with lower energy costs as the main driver, and the market was no longer fully pricing in a rate hike by the US Fed this year. Recently, as delivery neared, suppliers accelerated the transfer of lead ingots to delivery warehouses...

[SMM Lead Morning Meeting Minutes: Supply-Side Contraction Eases Inventory Buildup Pressure, Lead Prices Expected to Maintain Consolidation Trend] PBOC: Keep the RMB exchange rate basically stable at a reasonable and balanced level. Recently, primary lead and secondary lead enterprises in some regions have undergone maintenance or production cuts, leading to regional supply tightening...

[SMM Lead Morning Meeting Summary: Delivery-Driven Inventory Buildup Puts Pressure on Short-Term Lead Prices, Which Will Consolidate on a Subdued Note] According to US media: Trump has delayed military action against Iran, saying he is "handling the Iran issue quietly." Recently, social inventory of lead ingots has been accumulating, which is a normal phenomenon before the delivery of SHFE lead...

Next week, the key macroeconomic data will include the US July unadjusted CPI YoY rate, July retail sales MoM rate, and preliminary August one-year inflation expectations. On the geopolitical front, tensions in the Middle East have eased. According to US media, Iran and Oman have reached a temporary agreement on the Strait of Hormuz issue; meanwhile, US President Trump again stated that military operations against Iran may end soon. In addition, the US will release several economic indicators next week, and markets will continue to monitor statements from Fed officials on future monetary policy. In the short term, the macro front remains highly uncertain, providing limited support for base metal prices. On the LME lead front, suppliers in markets outside China have been actively picking up goods recently, with LME lead inventory dropping by over 16,000 mt this week. However, considering the current overseas lead consumption situation, the supply shortage is mainly concentrated in 4N lead, while 3N lead trading remains sluggish. The market widely views this destocking as a result of inventory transfers rather than improvement in end-use consumption. Meanwhile, LME lead Cash-3M contango widened further to -$47.56/mt, also reflecting that expectations for spot consumption improvement remain limited. Attention should still be paid to developments in the Middle East and the Fed's monetary policy impact on the base metal market. Next week, LME lead is expected to continue its range-bound consolidation, trading at $1,870-1,915/mt. For SHFE lead, the accumulation of lead ingot social inventory is a normal phenomenon ahead of SHFE lead delivery. As delivery approaches next week, suppliers are expected to further increase shipments to delivery warehouses, and visible inventory may continue to rise, exerting some pressure on lead prices in the short term. However, on the supply side, maintenance shutdowns at major primary lead delivery brand smelters are gradually starting, which could become an important factor supporting lead prices in mid-to-late August. The most-traded SHFE lead contract is expected to dip first and then stabilize and rebound, with a trading range of 15,450-15,900 yuan/mt. Spot lead price forecast: 15,400-15,650 yuan/mt. In the short term, downstream lead-acid battery enterprises are seeing both production recovery and output cuts, and consumption improvement remains limited, providing insufficient support for lead prices. On the supply side, maintenance shutdowns at primary lead smelters are increasing, and market availability of goods is expected to tighten gradually, with primary lead spot cargo likely to maintain a slight premium. If lead prices gradually recover, secondary lead enterprises' losses are expected to be repaired, and smelters' willingness to sell may pick up accordingly, with secondary refined lead trading at a discount likely to increase.

It is reported that this week (July 31 – August 6, 2026), the comprehensive operating rate of primary lead smelters in the three provinces stood at 66.46%, a WoW decline of 0.56 percentage points. This week, the operating rate of primary lead smelters shifted to a decline, mainly due to medium-to-large smelters in Hunan entering maintenance, which caused a regional reduction in lead ingot supply. Meanwhile, a medium-sized smelter in Yunnan resumed production after maintenance, partially offsetting the decline. Next week, small-to-medium smelters in Yunnan will complete maintenance and resume production contribution. A medium-sized smelter in Hunan is about to enter maintenance, and the decline is expected to outweigh the growth, with the weekly operating rate of primary lead smelters continuing its downward trend.

It is learned that as of August 6, the in-factory inventory of major delivery brands of primary lead stood at 22,200 mt, down 2,200 mt WoW. This week, maintenance and production cuts increased at some primary lead smelters in south China, leading to a phased tightening of lead ingot supply. At the beginning of the week, affected by falling lead prices, downstream enterprises’ dip-buying interest picked up, driving the destocking of smelter inventories; however, as lead prices stopped falling and rebounded in the latter half of the week, downstream purchases turned cautious again, market transactions returned to just-in-time demand, and the decline in in-factory inventory was relatively limited. Next week will enter the week before delivery of the SHFE lead 2608 contract, and suppliers are expected to move more inventories to delivery warehouses for delivery; some in-factory lead ingots may continue to be transferred to delivery warehouses. Driven by the delivery factor, the in-factory inventory of primary lead smelters is expected to maintain its downtrend.