SMM Lead Price Forecast (Sept. 5-9)

SHANGHAI, Sept. 5 (SMM) – Despite rising LME lead prices, SHFE lead prices moved higher only modestly. The People’s Bank of China announced it would extend reserve requirements to include margin deposits effective September 5th, which will absorb liquidity and curb commercial bank lending. In response, SHFE lead prices failed to break through RMB 17,000/mt, and later moved lower to between RMB 16,750-17,000/mt. In the coming week, SHFE lead prices should move between RMB 16,700-17,200/mt due to concerns over cash liquidity in the future.
 
In domestic spot market, prices rose slowly from RMB 16,300-16,400/mt, to RMB 16,400-16,500/mt. Spot discounts over SHFE 1110 lead contract were between negative RMB 450-500/mt. Both traders and downstream producers were cautious due to cash flow pressures at the month’s end. In the coming week, spot transactions will be made between RMB 16,300-16,700/mt, with spot discounts over SHFE 1110 lead contract between negative RMB 450-500/mt.