SHANGHAI, Jun. 2 (SMM) – SHFE 1508 lead shifted to the most-trading contract. The contract closed down RMB 45/mt at RMB 13,915/mt during night session Monday due to longs’ closing positions. The slight drop in SHFE 1508 lead against LME lead’s large fall pushed SMM/LME lead price ratio up to 6.84.
The PBOC issued over 1 trillion yuan of pledged supplementary lending (PSL) to the state-run China Development Bank today, boding well for base metals. SHFE 1508 lead fell earlier but rebounded later on Tuesday. The contract touched a low of RMB 13,160/mt with shorts entering market and then rebounded, to move stably around RMB 13,200/mt. The prices ended the session at RMB 13,190/mt, down RMB 50/mt. Trading volumes totaled 3,118 lots with positions up 68 to 10,598.
Nanfang and Hanjiang brands quoted RMB 13,800/mt, a RMB 600/mt premium over SHFE 1508 lead contract price, versus RMB 13,700/mt for Yuteng brand, RMB 13,450/mt for Shuangyan (packed in iron) and RMB 13,350-13,400/mt for Honglu brand.
A small number of Nanfang brand goods entered market and Yuteng brand goods shipping from Guangdong to Shanghai also flowed into market, which helped ease spot tight supply. In response, cargo holders were more active in selling. Lead futures prices fell and downstream demand was poor. Downstream producers cut production and watched from sidelines, waiting for a price fall.
Deals were made at RMB 13,650-13,700/mt for braded one in Henan, with premium narrowing over SMM lead price of RMB 0-50/mt, weakening investors’ confidence.