SHANGHAI, Apr. 8 (SMM) – The most active SHFE 1405 lead contract price also fell last week to RMB 13,700/mt due to bearish technical indicators. Positions were down by 520 lots as the delivery date for the current-month contract neared. SHFE lead prices should initially test resistance at RMB 13,750/mt, but hover most of the week between RMB 13,650-13,800/mt based on negative technical indicators.
In China’s physical lead markets, no restocking activity was reported last week ahead of the upcoming Qingming holiday. Traded prices in the Shanghai market were mostly in the RMB 13,650-13,700/mt range. Chihong Zn & Ge, Nanfang, and Chengyuan branded lead supply was extremely limited, and warrants also fell to around 4,000 mt, with many traders holding back warrants. Lead warrants were offered in the Guangdong market at discounts of RMB 20-40/mt over the SHFE current-month contract prices due to ample supply, which helped boost transactions for low-priced Gejiu lead. Lead smelters are expected to slow deliveries this week due to low prices and improved cash flows, but since an increasing number of smelters are conducting maintenance as well, most supply will be supplemented by lead warrants. Purchasing by lead-acid battery producers will not improve significantly given low battery sales, so spot lead is expected to trade between RMB 13,600-13,750/mt. Humon and Shuangyan branded lead supply will be sufficient, but goods from Chihong Zn & Ge, Nanfang, and Chengyuan will be relatively limited in the Shanghai market, with a slight increase in warrants expected. Spot lead in the Guangdong market is expected to be sufficient.