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SMM Daily Review - 2011/7/25 Lead Market
Jul 26,2011 09:03CST
smm insight
On Monday, SHFE lead prices moved between RMB 17,480-17,525/mt after opening at RMB 17,530/mt

SHANGHAI, Jul. 26 (SMM) – On Monday, SHFE lead prices moved between RMB 17,480-17,525/mt after opening at RMB 17,530/mt. In the afternoon, SHFE lead prices stayed below RMB 17,500/mt due to falling stock and LME lead prices, dipping to RMB 17,400/mt. Finally, SHFE lead prices closed at RMB 17,410/mt, down RMB 170/mt. Shorts activities were stronger, and trading volumes were 1,424 lots, up 400 lots; positions were 8,534 lots, down 328 lots.

In China’s domestic lead spot markets, prices for lead ingot on Monday were little changed from last Friday, with offers for Chihong around RMB 17,050/mt and spot discounts between RMB 450-500/mt. Quotations for other brands such as Baiyin and Shuangyan were RMB 16,900-16,950/mt, while offers for Nanfang brand were limited. In the afternoon, well-known branded lead prices fell slightly to around RMB 17,000/mt, but prices for other brands were almost unchanged. In general, trading sentiment was muted on Monday.

53.3% of market players believe this week’s lead prices to mainly keep fluctuating. The uncertain result from the US debt ceiling talks, LME lead prices fluctuating around USD 2,700/mt, and reducing domestic lead supply under environmental protection inspections and power shortage, all of the above factors indicated unclear direction for lead price movements. Hence, these people believe domestic lead spot prices to keep fluctuating between RMB 17,000-17,200/mt this week.

26.7% of market players are optimistic, believing market focus should turn to the US after a consensus was reached about the bailout plan for Greece and possibility of US national debt ceiling hike should benefit metals markets. Besides, smelters production resumption is slower than downstream producers, which should also boost lead prices, but any price gains should be limited, with prices expected to up to RMB 17,300-17,500/mt this week.

The remaining 20% of market players predict lead prices to fall this week. They believe LME lead prices may fall from the USD 2,700/mt level in the short term, which will drag domestic lead spot prices to RMB 16,800-17,000/mt.

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