SHANGHAI, Jan. 21 (SMM) – The 1303 SHFE lead contract became the most actively traded contract last week, with prices moving around RMB 15,300/mt before dipping to RMB 15,035/mt, its lowest mark since August 2012. Although the US housing starts hit a four-year high and the initial jobless claims fell to their lowest level since January 2008, market players were still concerned over the US debt ceiling issue. SHFE lead prices, influenced by LME lead prices and the recent surge in SHFE lead inventories, should be between RMB 15,130-15,330/mt this week.

Spot lead in China was traded last week at RMB 14,630-14,740/mt, with spot discounts over the most active SHFE lead contract price narrowing to RMB 350-450/mt. Hedge trading increased slightly at mid-week, but trading remained weak as cargo holders held prices firm since downstream buyers had no plans to replenish goods ahead of the Chinese New Year holiday. Despite limited orders at downstream enterprises and high finished goods inventories, downstream buyers are expected to increase raw material purchases this week due to the approaching Chinese New Year. Smelters will be actively moving goods to relieve financial pressures, so spot lead prices are expected to be between RMB 14,650-14,800/mt.