Lead Price Forecast (Sept.26-30)

SHANGHAI, Sept. 26 (SMM) – SHFE 1111 lead contract became the most actively-traded contract last week. After falling below RMB 16,000/mt on Monday, SHFE 1111 lead contract prices closed higher over the next two days, but remained weak, and on Thursday briefly set a new low of RMB 15,020/mt since its launch. Both trading volumes and positions were limited. SHFE 1111 lead prices are expected to test RMB 14,000/mt in the coming week.

Domestic spot lead prices followed suit, falling from RMB 15,900/mt in earlier week to around RMB 15,350/mt at the week’s end, and with spot discounts over SHFE 1111 lead contract between RMB 50-100/mt. Although domestic lead smelters were unwilling to move goods after prices fell below costs, market supply was still sufficient due to arbitrage trading. Downstream producers made some purchases in mid-week as prices showed signs of stabilizing, helping improve market trading sentiment. Recently, the market has been dominated by bearish and cautious trading sentiments, which will also weigh on spot prices. With cash flow pressures at the month’s end, markets are not expecting any large-scale stock replenishment ahead of China’s National Day holiday. In the coming week, domestic spot prices will likely fall below RMB 14,000/mt.