SHFE Lead Finds Support from 5-Day Moving Average (2015-12-25)

The power rationing in Yunnan, Henan, and Hunan since July-August and the power rationing in Jiangxi and Guangxi in September are undoubtedly the current hot spots. According to a recent SMM survey, the power rationing in Jiangsu, Guangdong and other regions in China has continued. Since late September, the social inventory of lead ingots has declined due to the combined effects of losses, power rationing and environmental protection.

LME lead will fluctuate at highs between USD 2,460-2,490/mt today.

Motive battery supply is tight in China's market and will ease in mid and late June.

Average operating rate at surveyed 51 Chinese lead-acid battery producers was 62.12% in March, up 3.35 percentage points MoM but down 4.41 percentage points YoY.

SHFE 1702 lead started at RMB 18,800/mt and finally ended at RMB 18,780/mt, up RMB 315/mt or 1.71%.

SMM survey of 30 Chinese lead smelters reveals that 33% of them see LME lead to drop below USD 1,843/mt this week and SHFE 1610 lead to fall below RMB 13,500/mt and test the 60-day moving average.

LME lead will narrowly range USD 1,825-1,845/mt during Asian trading hours Monday.

With positive technical indicators and expectation for loose macro environment, both LME and SHFE lead should move at highs next week, SMM lead group predict.

LME lead will remain under downward pressure and will range USD 1,660-1,680/mt during Asian trading hours Monday.

LME lead will narrowly range USD 1,700-1,720/mt during Asian trading hours Friday.