Overall, the secondary lead market will remain in a pattern of "weak cost support and strong consumption suppression" in the short term. Smelter production resumptions in June will find it difficult to fully offset previous cuts, with the supply side showing marginal improvement but remaining tight. Lead prices will continue to fluctuate weakly.

SMM, June 9 – Overnight, the LME lead 3M contract opened at $1,991/mt, briefly rallied to $1,992/mt (highest price) during the Asian session, then came under pressure and pulled back. In the European session, prices staged a modest recovery but faced notable resistance, fluctuating downward again to a low of $1,987.5/mt before closing at $1,988/mt, edging down $0.5/mt, or 0.03%, from the previous trading day. Overnight, the most-traded SHFE lead 2607 contract opened at 16,300 yuan/mt, then fluctuated downward under pressure, falling to a low of 16,155 yuan/mt. It subsequently rebounded slightly and moved sideways in a range of 16,170-16,205 yuan/mt, eventually closing at 16,180 yuan/mt, posting a four-day losing streak, down 160 yuan/mt, or 0.98%. Recently, the operating rate at secondary lead smelters has rebounded, and as primary lead producers resume production after maintenance, the supply of lead ingots has continued to expand, with June production expected to turn from a decline to an increase. However, the downstream lead-acid battery market is in its traditional off-season, with enterprises mainly making just-in-time procurement, and consumption remains sluggish. Meanwhile, as the delivery date approaches, invisible inventory is shifting to visible inventory, making inventory buildup pressure more evident. From the cost side, against the backdrop of weakening lead prices, secondary lead enterprises have proactively lowered their procurement prices for scrap batteries, weakening the level of support somewhat. Still, scrap battery raw materials provide a floor of support, and together with smelters’ strong reluctance to sell at low prices amid expanding secondary lead losses, this continues to offer a degree of underpinning for lead prices, limiting room for deep price declines.

Futures: Overnight, the LME lead 3M contract opened at $1,991/mt, briefly surged to $1,992/mt (the highest price) in Asian trading before pulling back under pressure; during European trading, although there was a slight recovery, resistance was notable and it fluctuated downward again, touching a low of $1,987.5/mt, eventually closing at $1,988/mt, down $0.5/mt from the previous trading day, a decline of 0.03%. Overnight, the most-traded SHFE lead 2607 contract opened at 16,300 yuan/mt, then fluctuated downward under pressure, touching a low of 16,155 yuan/mt before rebounding slightly, moving sideways in the 16,170-16,205 yuan/mt range, and ultimately closing at 16,180 yuan/mt, recording a four-day losing streak, down 160 yuan/mt, a decline of 0.98%. On the macro front: Israel and Iran exchanged fire for the first time since April, and after Trump intervened, both countries announced a temporary halt to attacks. U.S. media: Trump warned Netanyahu that if he wages war with Iran again, he may find himself fighting alone. Iran's UN representative: hopes that the US-Iran negotiations will reach an agreement by the end of June. South Korean regulatory authorities will review speculative won trading. OpenAI disclosed it has secretly filed for an IPO. The CPC Committee of the National Financial Regulatory Administration held an enlarged meeting: to steadily promote the resolution of risks at local small and medium-sized financial institutions and deeply rectify disorderly competition in the financial sector. Spot fundamentals: SHFE lead remained in the doldrums, suppliers sold as they saw fit, premiums and discounts quoted yesterday were stable compared to last Friday, and primary lead smelter self-picked-up cargoes were ample, with mainstream production area quotations at discounts of 25 yuan/mt to premiums of 25 yuan/mt against the SMM #1 lead average price. In the secondary lead market, smelters gradually lowered scrap battery purchase prices to ease losses, some smelters resumed shipments, and secondary refined lead was quoted at discounts of 25 yuan/mt to premiums of 25 yuan/mt against SMM #1 lead, at the same level as primary lead prices. However, downstream enterprises had limited just-in-time procurement and mostly adopted a wait-and-see attitude, resulting in sluggish spot order transactions. Inventory: As of June 8, LME lead inventory decreased by 1,100 mt to 309,250 mt; SMM lead ingot social inventory across five locations totaled 64,700 mt, down 2,100 mt from June 1 and down 2,400 mt from June 4. Today's lead price forecast: Recently, operating rates at secondary lead smelters have rebounded, combined with primary lead enterprises resuming production after maintenance, leading to a continued increase in lead ingot supply. June production is expected to shift from decline to growth. However, the downstream lead-acid battery market is in its traditional off-season, with enterprises mainly making just-in-time procurement and consumption remaining sluggish. Additionally, as the delivery date approaches, invisible inventory is turning into visible inventory, further intensifying inventory buildup pressure. Cost side, amid weakening lead prices, secondary lead enterprises proactively lowered scrap battery purchasing prices, weakening support; however, scrap battery raw materials still had bottom support, and coupled with strong sentiment of holding back from selling at low prices among smelters amid widening losses in secondary lead, this still provided some floor to lead prices, limiting the room for deep price declines.

SMM Jun 8: The most-traded SHFE lead 2607 contract opened at 16,392 yuan/mt intraday. It edged down slightly early in the session, then moved sideways below the average price line. The tug-of-war between longs and shorts intensified, and lead prices came under pressure in the afternoon, quickly sliding to a low of 16,305 yuan/mt. In late trading, although there was a slight recovery, the rebound was limited. It finally closed at 16,340 yuan/mt, posting a three-day winning streak, down 65 yuan/mt or 0.40%. This week, operating rates at secondary lead smelters rebounded somewhat, driving the release of incremental market supply. Meanwhile, as the delivery date approached, current lead ingot inventory also rose compared to early June. Against the backdrop of continuously weakening lead prices, secondary lead enterprises actively lowered scrap battery procurement prices, further weakening the support from raw material costs. Combined with sluggish downstream consumption, lead prices are expected to be under pressure in the short term. Data Source Statement: All data other than publicly available information are processed by SMM based on public information, market communication, and SMM's internal database models, for reference only, and do not constitute decision-making advice.

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.

SMM, June 8: Last Friday, the LME lead 3M contract opened at $2,015/mt, edged down slightly in the Asian session and then moved sideways in the range of $2,006.5-2,012/mt; during the European session, driven by capital, it gradually strengthened, rose to a high of $2,018.5/mt, but encountered obvious resistance, pulled back near the close, dipped to $1,999/mt, and finally closed at $1,995/mt. On Friday night, the most-traded SHFE lead 2606 contract opened at 16,380 yuan/mt, briefly surged to 16,455 yuan/mt at the start, then met resistance and pulled back, subsequently fluctuated downward and broke below the daily average support, dipped to 16,365 yuan/mt, and finally closed at 16,405 yuan/mt, forming a small bearish candlestick, down 30 yuan/mt, or 0.18%. Recently, primary and secondary lead enterprises in Henan, Anhui, and other regions have resumed production intensively, leading to a significant increase in lead ingot supply; however, downstream consumption recovery has been slow, enterprises' purchase willingness remains weak, and combined with the off-season and high temperatures, some downstream enterprises plan to suspend production and take holidays, which will further weaken consumption. However, during the decline in lead prices, scrap battery prices have seen relatively limited declines due to tight supply, causing secondary lead enterprises' losses to widen, while the cost side still provides some support to lead prices.