SHANGHAI, Apr. 1 (SMM) – The most active SHFE lead contract price moved last week between RMB 13,750-13,800/mt, hovering between the 10-day and 20-day moving averages. Positions increased by more than 4,000 lots as market sentiment gradually turned bullish. SHFE lead prices are likely to move higher to within the RMB 13,750-13,850/mt range, but will meet strong resistance at RMB 13,850/mt.
China’s physical lead markets encountered oversupply conditions last week due to tight liquidity at the end of the first quarter. In the Shanghai market, spot lead traded essentially at RMB 13,700/mt. Lead smelters, including Chengyuan, Nanfang, Chihong Zn & Ge, and Tongguan, all increased deliveries and inflated market supply, but other low-priced lead goods were barely found. Spot lead was sold between RMB 13,550-13,650/mt in thin trading in the Guangdong market. Trading activity improved after the price gap between Gejiu and other leading brands expanded. Traded prices in the Tianjin market last week were relatively high at RMB 13,700-13,800/mt after Liaoning Haicheng and Huludao Nonferrous Metals both restricted sales. Spot lead is set to trade this week higher between RMB 13,650-13,800/mt. Lead smelters will be less willing to move goods as tight end-of-month liquidity eases at the start of April, but supply will also fall due to maintenance or cuts in output at some smelters, lending support to lead prices. In addition, lead-acid battery producers will show stronger buying interest in early April as cash flows improve.