SHANGHAI, Mar. 4 (SMM) – SHFE 1404 lead contract prices underperformed LME lead prices and fell below RMB 13,900/mt, down from RMB 14,000/mt. Contract prices were also held back by resistance at all moving averages. Trading volumes and positions both fell as well, indicating a lack of market confidence. Gaining momentum from LME lead prices, SHFE lead prices are expected to test resistance at the RMB 14,000/mt mark this week due to strong buying support.
In China’s physical lead markets, #1 lead prices traded mostly between RMB 13,750-13,850/mt throughout last week. Although lead smelters moved goods normally, supply still exceeded demand since downstream producers had little buying interest due to tight liquidity and out of fears that lead prices would fall. Lead smelters will continue to trade normally and buying interest from downstream producers should show signs of improvement due to easing liquidity at the start of the new month. Transactions should also improve and traded prices are expected to rebound to RMB 13,900/mt.