SHANGHAI, Dec. 8 (SMM) – SMM survey of 30 Chinese market players shows the following:

43% industrial insiders see LME lead to rise above USD 1,700/mt this week and SHFE 1602 lead to return above RMB 13,000/mt. The Shanghai Cooperation Organization (SCO) Summit will be held in Zhengzhou on Dec. 14-15, leading to operation halts at some smelters in Henan. Production will increase 5,000 mt at Xinling Lead Industry after operation resumption late November. However, Jinli Lead will cut production by a total of 1,000 mt for 7-10 days and approximately 5,000 mt will be affected at Yuguang Gold & Lead because of equipment failure and the SCO Summit.  

See SMM forecast, Please Click: LME Lead to Move in a Tight Range Next Week amid Mixed News

Secondary refined lead smelters are active in buying secondary lead with continuous rise in lead prices recently. And tightness in secondary lead will support lead prices. Besides, scrap battery prices trace lead prices up, boding well for secondary lead prices. Tianneng Group and Cahowei Power frequently announces price hike with wholesale price for 12AH and 20AH batteries up RMB 10-20. And distributors rush to build stocks, growing demand for lead. Technically, LME lead finds support at the 40 and 60-day moving averages with promising technical indicators.

20% respondents expect LME lead to fall below USD 1,640/mt this week and SHFE 1602 lead to test support at RMB 12,600/mt. On the macro side, US ADP employ and non-farm payroll data beat forecast last week. Also, US Q3’s GDP was revised up above 2%. All those factors boost expectation for US rate hike in December. As such, US dollar will still remain at highs this week, depressing base metals prices.

Also, price edge of RMB 300/mt for secondary refined lead attracts more buyers, cutting demand for primary lead. Additionally, SMEs show little interest in buying lead due to weak orders.

The 37% market players note that LME lead will move between USD 1,670-1,710/mt this week and spot lead will trade at RMB 13,000-13,200/mt. Overall supply heads for losses and demand still stays weak. Despite strong dollar, market will continue digesting news of output cut of other metals and stock-piling by the SRB.