Ample Supply to Pressure Shanghai Spot Lead Prices, SMM

SHANGHAI, Jun. 5 (SMM) – Ample supply in Shanghai spot lead market will leave local lead prices weak at 13,500-13,700 yuan per tonne next week, SMM lead research team says.

Goods from Guangdong will arrive in Shanghai next week. Meanwhile, goods from Guangxi’s Nanfang Nonferrous and Chengyuan Nonferrous will also be shipped to the east China city, driving up local lead supply, in turn weighing on spot lead prices.

"Heading into June, smelters will feel stronger financial pressures which should push them to sell actively, and the resulting supply growth may also pressure prices," SMM analyst said. 

In Yunnan, the environmental protection crackdowns have shut down most blast furnaces, which, plus the tight crude lead supply, left low operating rates at lead smelters. However, local supply did not fall short as demand was anemic. 

As for SHFE lead, SMM sees the most active lead contract to test support at 13,000 yuan per tonne next week, wtih technical pressure growing and shorts entering the market.

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