63% Market Players Pessimistic Over Lead Prices This Week, SMM Survey

SHANGHAI, Nov. 24 (SMM) – SMM survey of 30 market players reveals the following:

63% industrial insiders expect LME lead to fall to USD 1,500/mt this week and SHFE 1601 lead to test support at RMB 11,600/mt. US upbeat economic figures help to raise bets for USD Fed to raise rate soon. Besides, most US Fed officials agree hike rate in December, growing the bets to 70%. US dollar hit a seven-month high on Monday morning, weighing on base metals. SHFE nickel fell to daily limit today and LME lead lurched down with poor technical indicators. Bearishness prevails in market with base metals prices falling across the board. On the demand side, lots of downstream lead-acid battery makers remain idled, weakening demand for raw materials.

See SMM forecast, please click: LME Lead Set for Further Losses Next Week

The remaining 37% respondents believe that LME lead will move around USD 1,560/mt this week and spot lead will trade at RMB 12,500-12,650/mt. First, price gap between secondary refined and SMM #1 lead gradually disappears and this shifts more buyers to SMM #1 lead. Second, many secondary lead producers shut down in Shandong, Hebei and Henan due to environmental protection crackdowns and thinner profits, tightening spot supply. Third, motive battery makers will build stocks in November-December as battery replacement accelerates with weather getting cold and as distributors ramp up sales for year’s target.

Economic environmental situation and base metals are pessimistic at present despite of above supportive factors.