SHANGHAI, Oct. 24 (SMM) –Last week, prices in China’s domestic spot markets slid from RMB 15,000/mt, to RMB 14,100-14,180/mt on Thursday, and rallied to around RMB 14,350/mt on Friday, down an average of RMB 1,000 within the week. Smelters’ strong unwillingness to move goods helped support spot prices, with spot premiums over SHFE 1111 lead contract expanding to positive RMB 100-150/mt. Downstream buying interest was high at low prices.
If prices remain sluggish, domestic lead smelters will remain reluctant to move goods unless they experience tight cash flow pressures. Downstream producers will likely build stocks at lower prices in preparation for the upcoming winter peak demand period for lead-acid battery consumption, which will support spot prices. Spot premiums over SHFE three-month lead contract will expand to above RMB 200/mt, with transactions expected between RMB 13,800-14,500/mt.