SHANGHAI, Sept. 9 (SMM) – SHFE 1511 lead immediately dropped to RMB 13,250/mt after opening Monday evening session at RMB 13,315/mt. Then the contract grew to RMB13,280-13,300/mt, contributed by rising longs and finally ended at RMB 13,320/mt, losing RMB 20/mt.
SHFE lead fell to RMB 13,260/mt following the open of Tuesday trading session and then moved stably. Nonetheless, after 11:00 am, SHFE lead slid at a faster pace to RMB 13,070/mt. The contract bounced back slightly near session’s end on the back of a rally in Chinese stock market and finished down RMB 210/mt at RMB 13,130/mt. Trading volumes totaled 3,604 lots and positions decreased 1,320 to 12,600.
Spot lead supply increases sharply in Shanghai and Guangdong as lead smelters are eager to sell after China’s 3-day holiday. Traders sell SHFE lead but buy in spot market as they believe that spot lead will slip slower than SHFE lead. Other speculative traders follow those traders to withdrawn. Those factors are behind the sharp fall in SHFE lead prices.
In Shanghai, traded price was mainly RMB 13,400/mt for Nanfang brand, RMB 140/mt above SHFE 1511 lead before SHFE 1511 lead slumped on Tuesday. Trading activity was active then. Humon and Hanjiang brands were offered at RMB 13,380/mt, versus RMB 13,360/mt for Mengzi brand.
Smelters, namely Mengzi Mining & Metallurgy, Hechi Nanfang Nonferrous Metals Group, Shandong Humon Smelting and Western Mining still shipped goods out. Besides, trades rushed to sell following the plunge in SHFE lead prices. Consequently, spot supply was ample in market. Downstream buyers replenished some stocks. However, transactions dimed again after the slump in SHFE lead.