SMM Lead Market Daily Review (2014-10-9)

SHANGHAI, Oct. 10 (SMM) – Lead for November delivery on the Shanghai Futures Exchange, the most active contract, opened at RMB 13,910/mt during Wednesday’s night session, and then tracked LME lead down to RMB 13,825/mt. The price of the most active contract later recovered slightly due to some buying, and closed down RMB 25/mt at RMB 13,845/mt. Trading volumes for the contract slumped to 272 lots, but positions added 38 lots to 15,182 lots.

On Thursday, SHFE lead fluctuated between RMB 13,850-13,880/mt in the morning trading session, and rose to an intraday high of RMB 13,980/mt subsequently, boosted by shorts liquidating positions. The price of the soft metal closed up RMB 75/mt at RMB 13,945/mt on Thursday. Trading volumes for the SHFE 1411 lead contract totaled 2,218 lots, and positions shed 254 lots to 14,890 lots. SHFE lead is expected to rise further for the near future given a slew of positive technical indicators.

On the Shanghai physical lead market, Chihong Zn & Ge brand traded Thursday at RMB 13,750-13,760/mt, an around RMB 100/mt discount to the most active SHFE 1411 lead contract. Traded prices were RMB 13,740/mt for Chengyuan brand and RMB 13,710/mt for Hanjiang brand. Lead smelters moved goods in light volumes since ex-factory prices in Henan, Shandong, and Anhui were all higher than those in Shanghai. Traders were reluctant to sell due to low inventories and out of expectations that prices will rise for the near term. Meanwhile, downstream producers were actively buying on Thursday.