SHANGHAI, Nov. 4 (SMM) – The most active SHFE 1312 lead contract prices moved in tandem with LME lead prices and hovered around RMB 14,440/mt early last week. SHFE lead prices later edged lower to around RMB 14,350/mt, but found support at the 20-day moving average. SHFE lead prices should hover between RMB 14,250-14,450/mt, heavily influenced by LME lead prices and pressure from several moving averages.
In China’s spot lead market, most cargo holders traded aggressively to generate cash at the end of the month, but downstream producers expressed little buying interest due to their bearish view on spot lead prices. As a result, traded prices mostly were in RMB 14,150-14,300/mt range and discounts for branded lead held steady between RMB 120-170/mt over the most active SHFE lead price. The current liquidity crunch should ease in November due to the government’s recent capital injection, which should in turn boost downstream buying interest. Smelters will continue to trade as usual, but downstream buying interest will likely only partially recover. In this context, spot lead prices are expected between RMB 14,150-14,350/mt, with a smaller discount for spot lead over the most active SHFE lead contract price.