SMM Lead Market Daily Review (2014-6-24)

SHANGHAI, Jun. 25 (SMM) – Prices for the most active SHFE 1408 lead contract surged briefly to RMB 14,275/mt after starting Monday’s night session higher at RMB 14,170/mt, but later fell back to end up RMB 50/mt at RMB 14,170/mt. During the night session, trading volumes for the most active contract reached 892 lots, and positions expanded 368 lots to 7,246 lots.

On Tuesday, SHFE lead prices initially followed LME lead prices down, but later steadied around RMB 14,145/mt before ending up RMB 25/mt, or 0.18%, at RMB 14,145/mt. Trading volumes for the most active contract added 1,260 lots to 2,758 lots, and positions increased 292 lots to 7,170 lots. Total trading volumes rose by nearly 3,000 lots to around 6,000 lots, and total positions increased 1,106 lots to 17,000 lots on Tuesday. SHFE lead prices are expected to trade in ranges for the near term.

In the Shanghai physical lead market, goods from Chihong Zn & Ge, Chengyuan, and Nanfang traded Tuesday at RMB 13,970-13,980/mt, a RMB 180/mt discount over the most active SHFE 1408 lead contract. Traded prices were around RMB 13,950/mt for Tongguan, Hanjiang, and Shuangyan brands, and RMB 13,940/mt for Humon brand. Lead smelters slightly ramped up deliveries, pressured by tight liquidity at the end of June, and trading activity among traders weakened due to widening price gap between SHFE and physical lead prices. Downstream producers expressed lower buying interest after lead prices rose on Tuesday.