50% China Lead Producers See Lead Prices to Stabilize This Week, SMM Survey

SHANGHAI, Dec. 29 (SMM) – SMM survey of 30 industrial insiders reveals the following:

50% investors note that LME lead will range USD 1,700-1,750/mt this week and spot lead will trade at RMB 13,150-13,300/mt. Financial markets will continue to be closed till early this week from last weekend for the Christmas Holiday and markets in China, US and Europe will be closed for the New Year holiday. Thus, lead prices should move in a tight range amid cautious sentiment in market. What’s more, spot supply remains insufficient in market and on the other hand demand also decreases. 

See SMM Price Forecast, Please Click:LME Lead to Trade at High Next Week 

23% market players expect LME lead to challenge from USD 1,750/mt this week and SHFE 1602 lead to stabilize at RMB 13,200/mt. Primary lead tightens in Henan, Jiangxi, Yunnan, Guangdong and Shanghai at present. Chinese lead smelters should move limited goods out despite the end of term contracts for 2015, which will not ease spot supply in short term. Besides, lots of disqualified secondary lead producers remain idled owing to stricter environmental protection inspection and most of them tend to start New Year holiday ahead of schedule. Reduction in overall supply will boost lead prices.

Also, consumption remains upbeat in ignition battery market. Price hike by leading battery makers stimulates distributors to buy at lows, leading to supply tightness at some ignition battery makers. And large producers keep steady operating rates. Technical indicators also show upside trend for lead prices.

27% respondents are bearish towards lead prices and they see LME lead to test support from USD 1,700/mt this week and SHFE 1602 lead to fall below RMB 12,900/mt. Chinese listed battery producers cut purchase for lead late December and year’s end after finishing production ramp-up for year’s target. And large producers will start to cut or halt purchase this week. Moreover, demand stays weak in motive battery market. Small makers keep low operating rates, and medium and large producers see falling orders. Both factors reduce demand for lead, curbing lead prices. Additionally, many investors are pessimistic over battery market ahead of the upcoming consumption tax, effective January 1, 2016. And bearish downstream buyers also cut purchase due to cash crunch late December.