SHANGHAI, Dec. 1 (SMM) – SMM survey of 30 industrial insiders shows that 70% of them see LME lead to fall to USD 1,570/mt this week and SHFE 1601 lead to drop below RMB 12,360/mt.
First, the Europe Central Bank should release additional easy policies in December. Besides, US Q3’s GDP was revised up to 2.1% and non-farm payrolls should not be soft, boosting bets for rate hike next month. Also, US dollar already broke above 100. All those factors will weigh on base metals prices.
See SMM forecast, please click:LME Lead to Challenge $ 1,630 Next Week, SMM expects
Second, growing TCs boost producing enthusiasm at domestic refined lead smelter. Moreover, disqualified secondary lead producers, staying idled previously, recover operation due to falling scrap battery prices and rising lead prices. This grows secondary lead supply in market, boding ill for lead prices.
Third, some small and medium motive and ignition battery makers leave operating rate as low as 20% owing to shortage of orders, cutting demand for lead. This will weigh on lead prices.
The remaining 30% market players expect LME lead to get support from USD 1,600/mt this week and China’s spot lead will trade at RMB 12,750-12,950/mt. Lead prices will not post a quick fall with help from other metals due to output cut news and stockpiling of the State Reserve Bureau (SRB). Beside, both LME and SHFE lead declined on November 30 but meanwhile both find support. Growing longs enter SHFE market, which will curb any large slip in SHFE lead. On the other hand, rising strength for SHFE lead is also weak.
Additionally, leading battery makers reportedly will hike battery prices on December 1 and this will boost distributors’ enthusiasm. Moreover, listed battery makers will ramp up production for year’s target, increasing demand for lead. As a whole, lead prices should move in a range.