SHANGHAI, Jul.18 (SMM) -- SHFE lead prices were between RMB 17,050-17,250/mt in early week trading, then rose to RMB 17,700/mt in mid-week, with a daily gain of RMB 510/mt, or 2.97%. Over the weekend, SHFE lead prices erased pervious gains and moved down to RMB 17,550/mt. SMM expects SHFE lead prices to fluctuate between RMB 17,000-17,900/mt this week.
In China’s domestic lead spot markets, well-known branded lead mainly traded between RMB 16,720-16,800/mt in early week trading. Other brands such as Hongwu, Jinguan, and Shuikoushan brands traded between RMB 16,620-16,700/mt, with spot discounts narrowing from RMB 600/mt two weeks ago, to RMB 350-500/mt. In mid-week trading, production suspensions at smelters in Henan province, as well as gains by SHFE lead, pushed spot prices above RMB 17,000/mt. In response, spot discounts expanded to RMB 500-550/mt. Traders were unwilling to sell goods due to smaller arbitrage profits, while downstream producers refused to purchase at higher prices. In general, transactions last week were only moderate.
Smelters in Henan province have cut output due to environmental protection inspections, and the resulting lower market supply supported spot prices. Traders were largely unwilling to sell goods due to bullish sentiment, and coupled with production cuts in Henan province, SMM expects spot discounts will narrow to RMB 400-500/mt andlead spot prices to be RMB 16,800-17,300/mt this week. Some downstream producers restarted production, but purchased only cautiously at current high prices, keeping transactions muted.
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