SHANGHAI, Jun. 24 (SMM) – SHFE 1309 lead contracts became the most actively traded, with prices moving between RMB 14,110-14,170/mt early last week. As LME lead prices declined and the Shanghai Composite Index fell below 2,100, SHFE lead prices, although more resilient than other base metals, still fell below RMB 14,000/mt, or down 1.8%, and was only RMB 20/mt above this year’s lowest level. SHFE 1309 lead contract prices are expected to remain below RMB 14,000/mt this week.
Spot lead prices in China initially held steady at RMB 13,850-13,930/mt, but later fell by RMB 50-70/mt last week. Downstream buyers turned bearish and purchased goods only cautiously. Smelters, especially large-scale ones, increased deliveries for long-term contracts in order to improve cash flows at the month’s end. SMEs increased supply in spot markets, but transactions were limited. Selling interest in China’s spot lead market should rise this week due to smelters’ need for cash at the mid-year point, but downstream buyers which are also under growing financial pressure will still likely purchase only according to production needs. Recent declines in base metal prices have left downstream buyers cautious, but traders will be active trying to lower stock levels, pushing spot lead prices down to RMB 13,700-13,850/mt.