SHANGHAI, Sept. 22 (SMM) – It was reportedly that Glencore faced financial problems, fueling worries about sell-offs of nonferrous metals by Glencore. In response, SHFE lead lost more than RMB 300/mt. Later, panic gradually faded away. SHFE lead returned to RMB 13,230/mt before ending at RMB 13,145/mt, down RMB 180/mt. Trading volumes totaled 8,662 lots with trading volumes down 58 to 13,254.
In Shanghai, Nanfang brand quoted at RMB 13,320-13,350/mt, RMB 200-250/mt above SHFE 1511 lead, while some traders gave their offers RMB 60-100/mt above SHFE 1510 lead. Traded prices were RMB 13,250-13,310/mt for Humon brand with some offers at RMB 13,340/mt in market, versus RMB 13,220/mt for Ximai brand.
Nanfang and Humon brands lead was shipped to market. Traders were keen to sell with SHFE lead prices at lows but they were less willing to sell when SHFE lead prices grew. It was reportedly that large lead-acid battery makers built some stocks on Monday, leaving trading activities above last week.
A total of 30 market players surveyed by SMM revel the following:
40% of them see LME lead to fall to USD 1,650/mt this week and SHFE lead to test support at RMB 13,000/mt, saying downstream anemic consumption. Orders for ignition batteries are likely to fall, though August month-on-month auto production and sales turned better. Previously, downstream producers build large stocks before China’s Mid-Autumn festival and National Day holiday. But this year, they has not replenish stocks up to now and most producers express that they will still purchase as needed and plan to take vacations. LME zinc inventories surged 40% since August, depressing zinc prices. Lead is closely link to zinc and thus lead prices may be also weighed down.
7% industrial insiders expect LME lead to rise above USD 1,700/mt this week and SHFE lead to challenge RMB 13,400/mt, citing shortfalls in secondary lead supply and pre-holiday stock building. Many secondary lead smelters already suspended operation owing to environmental protection inspections in Shandong, Henan, Hebei and Anhui. One secondary lead smelter noted that environmental protection inspections almost halt trading for secondary lead in Shandong on Sept. 21. Tightening secondary lead supply will support lead prices. Some investors expect downstream buyers to increase purchase in this week or on the weekend.
The remaining 53% note that LME lead should move between USD 1,670-1,700/mt this week and spot lead will range between RMB 13,250-134,00/mt amid mixed macroeconomic news. Markets expect China’s Caixin manufacturing PMI for September to improve slightly during the September-October peak demand season. The US dollar will be supported by its overall positive economic fundamentals and a possible interest rate hike by the Fed in October. US monthly housing sales and durable goods order should be downbeat, which, however, will not change the overall upbeat tone of US economic fundamentals.
Technically, SHFE lead dived to RMB 12,995/mt last Monday but gradually regained losses. SHFE lead moves steadily at present and economic fundamentals remain stable. As such, lead prices will flat with last week.