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SMM Daily Review - 2012/4/16 Lead Market
Apr 17,2012 08:54CST
smm insight
Source:SMM
With respect to lead price trends this week, 53% industry insiders believe lead prices will fluctuate within the RMB 15,600-15,750/mt range.

SHANGHAI, Apr. 17 (SMM) – On Monday, SHFE lead prices opened RMB 150/mt lower at RMB 15,525/mt influenced by the dropping LME lead prices Friday. Later, prices moved within a narrow range to finally close at RMB 15,570/mt, down RMB 150/mt. Positions were up 16 lots to 2,066 lots, and trading volumes were down 208 lots to 212 lots.

In China’s domestic spot markets, lead prices were down RMB 100/mt compared with last Friday, and quotations for Chihong Zn & Ge, Yubei and Nanfang were between RMB 15,620-15,630/mt. Brands from Gejiu region were mainly quoted around RMB 15,510/mt. In the afternoon, brands from Gejiu were quoted between RMB 15,480-15,500/mt. Purchases were mainly made at low prices, leaving transactions muted.

With respect to lead price trends this week, 53% industry insiders believe lead prices will fluctuate within the RMB 15,600-15,750/mt range. Despite the signs of economic slowdown among major economies across the world, China’s domestic stock markets remain relatively firm at present. Meanwhile, discouraged selling interest at domestic lead smelters caused by low lead prices and cost pressures may help support lead prices. In this context, although lead prices are not likely to increase significantly, prices are expected to remain resilient to declines this coming week.

The remaining 47% were more pessimistic. China’s 1Q GDP growth was reported worse than the expected 8.3%, showing the lowest rise in the past three years. Meanwhile, Spanish government bond yields touched a high of 6% again, placing the European debt crisis under the spotlight. In China’s domestic spot markets, lead-acid battery producers are now in low demand season and only purchase on an as-needed basis. As such, these investors believe lead prices may fall to as low as RMB 15,450-15,600/mt in the coming week.

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