SHANGHAI, Oct. 20 (SMM) – SHFE 1512 lead dropped to RMB 13,410/mt after starting Monday trading session and then ranged between RMB 13,470-13,500/mt as China’s GDP data beat forecast, to end at RMB 13,480/mt, down by RMB 15/mt or 0.11%. Trading volumes fell 774 to 3888 while positions increased 456 to 15,590.

Jinsha brand quoted at RMB 13,550-13,570/mt on Monday in Shanghai, RMB 70-90/mt above SHFE 1512 lead. Mainstream traded prices were RMB 13,540/mt for Nanfang and Chengyuan brands, versus RMB 13,520/mt for Mengzi brand and RMB 13,500-13,510/mt for Humon brand.

Hechi Nanfang Nonferrous Metals Group and Shandong Humon Smelting moved goods to market but overall supply still stayed tight. Nonetheless, inventories piled up at downstream motive battery makers in an off-season. Some battery makers cut operation, decreasing demand for lead.

SMM survey of 30 industrial insiders shows that 50% of them see LME lead to drop slightly to USD 1,770/mt this week and SHFE 1512 lead to test support at RMB 13,300/mt.

China’s GDP grew 6.9% YoY in Q3, the lowest level since the financial crisis. Though the figure slightly beat forecast but fell below 7 for the first time in six years. The unemployment rate in China for September only increased 0.1 percentage point MoM to 5.2%. Economy slowdown and employment pressures boost bearishness in market. In response, lead prices will be depressed.

Leading battery makers start to cut operation with motive batteries in slow reason and thus orders at their co-packers decrease. Poor downstream demand will drag down lead prices. Additionally, technical indicators also show signs of downturn.

A total of 7% investors expect LME lead to challenge USD 1,820/mt this week and SHFE 1512 lead to rise to RMB 13,600/mt, citing tight supply of secondary lead and expectation for more pro-growth measures in China.

Disqualified secondary lead producers keep low operating rate due to thin profits and environmental protection inspections, tightening supply. This will support lead prices. Poor GDP data from China will boost the case for more stimulus measures, boding well for lead prices.

The rest 43% believe that LME lead will still hover around USD 1,800/mt this week and spot lead will trade at RMB 13,400-13,550/mt. Domestic consumption weakens but LME lead prices hold at highs. Also, though secondary lead supply stays low, downstream demand is also on the decrease. As such, lead prices should be flat this week.