SHANGHAI, Aug. 1 (SMM) –SHFE lead prices were also down along with falling stocks prices. On Monday, SHFE lead prices fell by RMB 170/mt, to RMB 17,410/mt. Lead prices in the SHFE market rallied on Tuesday, hitting RMB 17,835/mt, a high since late April and with prices returning above daily moving averages. Support for SHFE lead prices at RMB 17,500/mt is solid, and prices are expected to rise above RMB 18,000/mt in the coming week. The Shanghai Futures Exchange (SHFE) announced it would adjust margins for SHFE 1110 and forward lead contracts to 8% effective July 29th, in order to boost trading volumes for lead contracts. As a result, positions of SHFE 1110 lead contracts began to increase on Wednesday.
In China’s domestic spot markets, lead prices fluctuated around RMB 17,000/mt in earlier week. With rising SHFE lead prices, spot lead prices rose above RMB 17,000/mt, with prices of well-known branded lead hitting RMB 17,250/mt on Wednesday, but fell back later in the week to RMB 17,050/mt. Smelters were holding goods due to recent production cuts caused by environmental protection inspections and power restrictions. Traders and downstream producers showed little purchasing interest, however, due to tight cash flows at the month’s end, leaving overall market transactions quiet. Spot lead prices will likely return to RMB 17,500/mt if LME and SHFE lead prices advance.