SMM Lead Weekly Price Review and Forecast (Feb. 9-13, 2015)

SHANGHAI, Feb. 10 (SMM) – Lead for April delivery on the Shanghai Futures Exchange, the most active contract, fared better than LME lead and moved largely around RMB 12,500/mt last week. The most active SHFE lead contract has risen above major short-term moving averages, but will move largely between RMB 12,500-12,700/mt this week due to insufficient buying.

Spot lead in Shanghai traded at RMB 12,450-12,550/mt last week, shifting from a premium to par, then even a discount to the most active SHFE lead contract. Lead smelters in Henan rushed to sell, with leading brands trading at a RMB 100/mt discount to the average SMM #1 lead price. The ex-works price of leading brands from Hunan was at a RMB 150/mt discount to the average SMM #1 lead price, nearly double the earlier RMB 80/mt discount.

Spot lead prices in China should range between RMB 12,500-12,600/mt this week, with no transactions expected. Most downstream producers have closed for the Chinese New Year holiday, while a few large downstream producers still in production will buy only under term contracts. Traders are expected to suspend operations this week.