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SMM Daily Review - 2012/4/9 Lead Market
Apr 10,2012 09:39CST
smm insight
SHFE lead prices, without directions from LME lead prices, opened at RMB 15,645/mt on Monday.

SHANGHAI, Apr. 10 (SMM) – As the US non-farm payrolls released last week turned out mixed, SHFE lead prices, without directions from LME lead prices, opened at RMB 15,645/mt on Monday. Later, China’s CPI growth for March was reported at 3.6%, indicating China would still be under great inflation pressures. As a result, SHFE lead prices hovered around the opening price, but found buying support at RMB 15,650/mt at midday to climbed to a high of RMB 15,720/mt. In the afternoon, prices fell and closed the day down RMB 100/mt to RMB 15,580/mt. Trading volumes decreased by 38 lots to 228 lots and positions remained little changed at 2,558 lots.

In domestic spot markets, quotations for Chihong Zn & Ge and Nanfang were between RMB 15,670-15,700/mt, and Shenqian was quoted at RMB 15,650/mt.With SHFE lead prices moving up, average lead price rose by RMB 30-50/mt. In the afternoon, SHFE lead prices returned to weak trends, and spot prices maintained in the RMB 15,670-15,730/mt range. Downstream buyers still purchased on an as-needed basis and mainly made inquiries, leaving transactions muted.

With respect to lead prices this week, 53% industry insiders are cautious, believing spot lead prices in China’s domestic markets will be between RMB 15,700-15,850/mt. On one hand, most investors hold a wait-and-see attitude towards market outlook with uncertainty in macro economic conditions, so lead prices will not likely rise before release of any directive news. On the other, sluggish consumption downstream in domestic spot markets and the remaining high costs at smelters offer certain support to lead prices. As such, lead prices are expected to maintain stable this week.

The rest 47% are relatively optimistic, holding that domestic spot prices should move up to RMB 15,700-15,850/mt with LME lead prices hitting the USD 2,100/mt mark. The expansion of spot premiums over LME lead prices gave certain support to LME lead prices, and Chinese domestic stock markets also showed notable rebounds to hovered around 2300 points. In addition, smelters were not willing to move goods at lower prices due to high cost, supporting low-end lead prices. However, increases in lead prices will be constrained by weak demand this week.

SHFE lead
lead price
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