SHANGHAI, Jun. 11 (SMM) – China saw growing primary lead supply and anemic demand lately, but SMM #1 lead managed to stay at 13,500-13,700 yuan/tonne and lead premiums in Shanghai also remained high. What’s behind the firm lead prices in China?
“This is partly because anticipation for more stimulus measures in China balanced out the negative influence of weak market fundamentals,” SMM lead analyst noted. The poor China CPI and PPI data released lately fueled hope that the central government will roll out more policies to help with the weak economy.
Another contributor should be the limited secondary lead supply, SMM reckons. Secondary lead output fell during busy farming season, while some downstream buyers preferred secondary lead over #1 lead lured by the 400-500 yuan price gap between the two products, benefiting lead prices.
“We should admit that weak fundamentals are pressuring lead prices, but China’s monetary easing and the El Niño will be subjects of speculation.
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