Lead Prices to Consolidate at High Levels This Week

SHANGHAI, Apr 24 (SMM) – Macroeconomic data due this week includes first quarter GDP data in the United States including the quarterly real personal consumption expenditures, the flash annualised quarterly core PCE price index, the annualised core PCE price index and personal spending in March. Recently, the market has predicted the Fed’s interest rate hike based on the downward pressure on the economy and the fact that the high inflation in the United States has not fundamentally improved.

It is generally expected that the Fed will raise interest rates by 25 basis points in May, and then temporarily stop raising interest rates.

LME lead stocks rebounded by 5,850 mt from a week earlier, returning to the 30,000 mt mark after six months. The backwardation of LME cash to 3-month contracts stood at $32/mt as of April 20. The fundamentals are mixed. Without major changes in the macro aspect, it is expected that LME lead prices will continue to fluctuate at highs this week, moving between $2,110-2,180/mt.

After the delivery of the SHFE 2304 lead contract last week, the social inventory of lead ingots declined significantly, pushing SHFE lead prices up to near 15,500 yuan/mt. But the off-season dragged down the lead prices thereafter. This week, downstream companies will restock for the Labour Day holidays, tightening lead supply. It is expected that lead prices will stop falling and rally. The most active SHFE lead contract prices are expected to stand at 15,200-15,400 yuan/mt this week.