SHANGHAI, Aug. 8 (SMM) -- Depressed by falling LME lead prices, SHFE lead prices slid below all moving averages, and dropped below RMB 16,000/mt on Friday along with diving US equities and weak LME lead prices, hitting the lowest level of RMB 15,960 since its launch, and with the biggest weekly decline of 8.9%. SHFE 1109 lead prices are expected to move between RMB 16,000-16,800/mt this week.
Domestic spot lead prices slid to RMB 16,500/mt on Thursday, down from RMB 17,000/mt early in the week, and fell below RMB 16,000/mt on Friday, with deals between RMB 15,950-16,050/mt. Spot discounts over SHFE 1109 lead contract prices narrowed from negative RMB 450-500/mt, to negative RMB 250-300/mt. Market supply rose as spot discounts narrowed, but price declines in the LME lead market added to the market’s wait-and-see attitude. Buyers only entered the market to buy on Wednesday when SHFE lead prices rallied, but left the market when prices fell again.
Production cuts at domestic lead smelters due to environmental protection inspections still remain, and smelters are still unwillingness to move goods, which will help support price. SMM expects domestic spot lead prices to move between RMB 15,800-16,500/mt and spot discounts will narrow to negative RMB 200-350/mt.