SHANGHAI, Jul. 30 (SMM) – SHFE 1510 lead outperformed LME lead, which allowed SMM/LME lead price ratio to grow to 7.56. SHFE lead dipped to RMB 12,975/mt after opening Wednesday evening session at RMB 13,050/mt, to close at RMB 13,010/mt, up by RMB 55/mt.

On Thursday, stronger dollar depressed base metal prices. But SHFE lead held firm between RMB 13,000-13,050/mt and later soared to RMB 13,170/mt due to short covering, to end at RMB 13,100/mt, up by RMB 145/mt.

Current positions of SHFE 1508 lead require a total of 9,975 mt to be delivered, but stocks in SHFE warehouses are only 8,788 mt. Meanwhile, high spot premiums will lure smelters to sell in spot market instead of delivering. The lack of deliverable goods may force shorts to close positions, which may explain today’s price hike.