SHANGHAI, Jun 4 (SMM) – Lead for July delivery, the most active contract, fell back last week to the RMB 13,900-14,000/mt trading range on the Shanghai Futures Exchange. The most active SHFE 1407 lead contract is forecast to swing between RMB 13,900-14,000/mt early this week and track LME lead prices up afterwards.
In China’s physical lead markets last week, there were signs that supply surplus was growing. Traded prices in the Shanghai market fell to 13,950/mt, down from the RMB 14,000/mt mark, with discounts for deliverable brands expanding to RMB 50/mt over the most active SHFE 1407 lead contract. The price decline was attributed largely to added deliveries from Guangxi Chengyuan Mining & Smelting, Nandan Nanfang Nonferrous Metals Smelting, and Anhui Tongguan Nonferrous Metals. Warehouse receipts for goods in the Guangdong market also traded at a wider discount of RMB 30-50/mt over the SHFE front-month lead contract, and traders in this region were actively moving goods. In the Tianjin market, Liaoning Haicheng Chengxin Nonferrous Metal carried out maintenance last week, but Huludao Nonferrous Metals resumed production. As oversupply conditions gradually ease this week, spot lead will trade largely between RMB 13,900-14,000/mt. Lead smelters which were forced to move goods at the end of May to improve cash flows will curtail deliveries this week. Lead-acid battery producers did not build stocks in large amounts ahead of the Dragon Boat Festival holiday and could purchase goods to need after restarting operations.