SHANGHAI, Mar. 17 (SMM) – Despite a stronger rebound than other base metals prices, the most active SHFE lead contract price still fell last week to a low of RMB 13,495/mt since trading began for the contract, with the loss due mainly to strong bearish sentiment. Positions shed nearly 2,000 lots. Any declines in SHFE lead prices will be limited now that buying support is increasing since investors believe prices have bottomed out. SHFE lead prices will move between RMB 13,400-13,600/mt.

In China’s physical lead markets last week, lead smelters held back goods after lead prices fell to levels close to costs. Downstream producers were active bargain-hunting early last week, but demand gradually waned as lead prices continued to fall. Traded prices for lead ingot varied between regions. Spot lead prices in the Shanghai market held firm above RMB 13,600/mt due to tight supply and traded at a premium over the most active SHFE lead contract price. Lead ingot prices in Guangdong and Hunan provinces, as well as some north China regions, all fell last week to between RMB 13,500-13,600/mt since supply was considered as ample. China’s physical lead markets will experience considerable pressures this week. First, outflows of deliverable goods will keep spot lead prices in check. Second, lead smelters will be reluctant to move goods if lead prices continue to fall, but downstream producers will still express little buying interest, providing limited support to lead prices. In addition, even though lead smelters should actively sell as lead prices rise this week, downstream producers are expected to stay on the sidelines, limiting any price gains.