SHANGHAI, Oct. 21 (SMM) –SHFE lead prices, boosted by rising LME lead prices, climbed to RMB 14,400/mt from RMB 14,100/mt, and attempted to push through the 60-day moving average. Positions continued to increase last week, with long investors prevailing in the market.
In China’s spot market, the average SMM #1 lead price gained only RMB 100/mt last week. However, downstream producers still considered the price unreasonably high and were reluctant to purchase. Spot lead in Shanghai was traded at a discount, but was down from a recent premium of RMB 60-70/mt, allowing arbitrage opportunities and keeping transactions brisk. Lead smelters will still trade aggressively this week since their inventories and output have both risen. Downstream producers, however, will purchase only as needed since spot prices are high, and will unlikely replenish inventories this week, which will keep spot prices subdued. Most market supply will be dominated by non-deliverable goods since widening gap between spot and futures will make it difficult for traders to move deliverable goods. Spot traded prices are expected in RMB 14,150-14,350/mt range this week.