SHANGHAI, Sept. 19 (SMM) – SHFE 1110 lead contract prices fell continuously in response to lower Chinese stock prices, with SHFE 1110 prices falling to a low of RMB 16,245/mt on Thursday. Last week, SHFE lead markets saw the first delivery since the launch of lead futures trading on the SHFE. SHFE 1109 lead contract prices extended losses and fell to a low of RMB 16,110/mt on its last trading day, with settlement prices at RMB 16,190/mt. In the coming week, SHFE lead prices will continue to fall, and will test support at RMB 16,000/mt, and the resistance level will be RMB 16,700/mt.
In domestic spot markets, smelters in Henan province remained closed due to environmental protection inspections, while power restrictions and water shortages in south China, as well lower lead prices, also caused smelters to cut output and limit market supply. Lead-acid battery producers, however, still made purchases at lower prices and helped prevent spot lead prices from falling quickly. Steady declines in SHFE lead prices helped narrow spot discounts, with discounts against SHFE 1110 lead contract prices narrowing from RMB 250-300/mt in earlier week, to RMB 200-250/mt. Domestic lead prices fell from RMB 16,150-16,230/mt in earlier week, to RMB 16,050-16,160/mt ahead of the weekend. The price spread between well-known brands and non-branded lead failed to widen despite the arrival of the delivery date. In the coming week, spot lead prices will likely fall below RMB 16,000/mt as spot discounts against SHFE 1110 lead contract prices remain between RMB 100-200/mt. However, since most smelters are unwilling to move goods, limited supply and downstream buying at lower prices will provide some support for spot lead prices. In this context, SMM expects spot lead prices to fluctuate between RMB 15,900-16,400/mt in the coming week.