Lead prices went up after a significant rise in withdrawal requests from LME warehouses. Requests increased by 35,225 tonnes, reaching 74,975 tonnes, mainly in Singapore and Taiwan. This marks the largest increase since June 9. As a result, LME lead prices rose by over 1.8% on Friday. Data from the Shanghai Futures Exchange showed an increase in weekly inventories for all major base metals. Copper stocks grew by 3,094 tonnes, totaling 84,556 tonnes. Aluminium inventories rose by 5,625 tonnes to reach 108,822 tonnes, while zinc stocks saw a weekly increase of 9.3%, hitting 54,630 tonnes, the highest level since April 18. This information includes forward-looking statements and is subject to risks and uncertainties. The markets and instruments discussed are for informational purposes only and are not investment recommendations. Conduct thorough research before investing, as there are significant risks involved, including the potential total loss of investment. We believe the high number of lead withdrawal requests indicates a tight physical market, suggesting a positive outlook for the metal in the short term. Derivative traders may want to consider establishing long positions, such as buying call options or lead futures, to take advantage of this upward price momentum. The current action pushing lead futures above $2,250 per tonne reinforces this strong immediate demand. This rush for physical lead is likely driven by restocking needs, especially in the automotive and industrial battery sectors, which make up over 80% of global lead consumption. Historically, sharp declines in LME inventory often lead to sustained price rallies as supply chains struggle to meet spot demand. The large withdrawals in Singapore and Taiwan are a key sign of this trend spreading across Asia. In contrast, the rising stockpiles of other base metals on the Shanghai exchange point to weakening demand in China. This suggests a bearish to neutral outlook for copper, aluminum, and zinc. Ongoing challenges in China’s property sector and recent manufacturing data, such as the Caixin Manufacturing PMI hovering near the 50-point mark, indicate stagnant growth, supporting this cautious stance. Given this evidence, we suggest initiating short positions on metals with the largest inventory builds. The reported 9.3% weekly increase in zinc stocks to their highest level since April signals a near-term oversupply meeting weak demand. Therefore, buying put options or shorting zinc futures could be a wise strategy. This creates a clear divide between the lead market and other industrial metals. We see an opportunity for a pair trade: going long on lead while shorting a basket of other metals, particularly zinc or copper. This approach would profit from the widening performance gap between a supply-constrained lead market and a demand-challenged environment for other base metals in the world’s largest consumer.

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