SHANGHAI, Feb. 10 (SMM) – Lead for April delivery on the Shanghai Futures Exchange, the most active contract, opened at RMB 12,580/mt and fell to RMB 12,530-12,550/mt afterwards before finishing at RMB 12,530/mt. Trading volumes totaled 1,888 lots, while positions added 132 to 16,638.

On Monday, SHFE lead hovered largely between RMB 12,520-12,540/mt and closed down RMB 60/mt at RMB 12,515/mt. Trading volumes for the most active contract totaled 3,282 lots, while positions added 200 to 16,706.

Supplies from Chihong Zn & Ge and Chengyuan traded at RMB 12,530-12,550/mt in Shanghai on Monday, a RMB 10-20/mt premium to the most active SHFE 1504 lead contract. Traded prices were RMB 12,500-12,520/mt for Humon, Shuangyan and Qinxin. Many traders have suspended operations, while a few downstream producers replenished input inventories in light volumes.

10% of 30 industry insiders in SMM’s survey expect LME lead and spot lead prices in China to rise to USD 1,880/mt and USD 12,550-12,650/mt, respectively, this week. Investors will largely rush to liquidate positions due to the approaching Chinese New Year holiday. Copper prices are expected to stage a rally should short-covering happen with current high LME copper positions. This, combined with a sustained rebound in crude prices, will help push up lead prices. Increased liquidity across the world will also give a boost to commodities prices.

20% of respondents, however, project that LME lead and spot lead prices in China will fall to USD 1,820-1,860/mt and RMB 12,450-12,550/mt, respectively, this week. These respondents argue that encouraging US economic indicators as well as a continued fall in the euro will combine to cause the US dollar strengthen, which will exert downward pressure on base metals prices. In China, lead smelters will sell actively to deplete finished-goods inventories and to generate cash. However, most downstream producers have already suspended production, while a few are buying only under term contracts. The resultant soft demand is expected to depress lead prices this week.

The remaining 70% of these industry insiders expect lead prices to move sideways this week due to low lead positions and sluggish spot lead trading.