Lead prices likely to stay under pressure,as macroeconomic factors make things tough for the metal. London Metal Exchange (LME) sees trading between $1,955-$2,000 per metric ton next week. Cash-3M spread just shifted from premium to $28.4 discount per ton.
Key economic data on tap — US May core PCE price index year-on-year rate,personal spending month-on-month rate, plus Eurozone's June manufacturing PMI flash. US Fed held interest rates steady in June but sent hawkish signals . Inflation forecasts up,rate hikes likely this year.
Geopolitically,US-Iran signed memorandum of understanding, starting 60-day talks. But tensions high — Israeli attacks on Lebanon reported, throwing Middle East peace talks into doubt.
Lead inventories on LME have fallen three weeks straight. Yet stocks still high at 300,000 tons. Tight supply backdrop clashes with demand expectations from downstream enterprises. Production picking up post-Dragon Boat Festival. But as half-year mark nears,big players will close books, pause lead ingot buys.
In China,Shanghai Futures Exchange (SHFE) faces challenges too. Most-traded lead contract seen between 16,250-16,650 yuan per ton next week . Spot prices forecasted 16,150-16,450 yuan per ton. Maintenance at lead smelters to tighten supply,possibly boosting prices.
Despite all this,mid-year capital recouping may cap lead price support . Suppliers likely to clear inventory, causing small discounts in spot lead vs . SMM# lead. Downstream enterprises under pressure,some using existing stock to keep production going, delaying new lead ingot buys…
