SHANGHAI, Jul. 9 (SMM) – SHANGHAI, Jul. 8 (SMM) – SHFE 1509 lead turned to the most active contract, to open Tuesday evening session at RMB 12,570/mt. The contract touched a low of RMB 12,200/mt and then grew slightly due to falling shorts, to close at RMB 12,530/mt, down RMB 255/mt.
China’s A-shares immediately dropped 8% after starting Wednesday trading session. SHFE nickel was closed for all day at daily downward limit price and iron ore futures dropped to daily limit. Pessimistic sentiment prevailed markets. SHFE 1509 lead declined to RMB 12,360-12,400/mt during morning session Wednesday, to end at RMB 12,150/mt, losing RMB 510/mt.
Low price of SHFE lead at RMB 12,020/mt is last seen in January 2015, which may not support SHFE 1509 lead prices. Thus, further fall in the contract should be warned.
Nanfang and Chenyuan brands were offerd RMB 600/mt higher than SHFE 1509 lead at RMB 13,000 in Shanghai, compared with RMB 12,930/mt for Jiangtong brand.
Lead prices plunged due to systematic risk. Smelters held back sales. Pre-sale goods from Guangxi Chengyuan Mining & Smelting flowed into market. Downstream producers showed little buying interest for fear of a further price fall. Thus, few trades were made July 8.