7% Chinese Investors Bearish toward Lead Price, SMM Survey

SHANGHAI, Feb. 2 (SMM) - SMM surveyed 30 industry insiders with regard to lead price trends this week and found that 43% see lead price rise. LME lead is expected to underperform SHFE lead and met pressure from USD 1,750/mt. SHFE 1603 lead should meet resistance from RMB 14,000/mt. There are only 2,828 mt of lead under warrants on SHFE delivery warehouses, compared with 4,600 positions on SHFE 1602 lead. When combined with suspension of logistics companies during the Chinese New Year holiday and spot supply tightness, a large number of longs are expected this week for SHFE 1602 lead.

About 50% see lead remain range-bound. Investors are expected to buy spot for delivery whilst selling futures given high profit. Nevertheless, spot lead supply is also limited. Rebound in crude oil prices should also lend some support to commodity price. SHFE 1602 lead is expected to fluctuate between RMB 14,000-14,900/mt, and LME lead should hover between USD 1,680-1,730/mt. Spot trade should be extremely thin at highs.

The remaining 7% are bearish, reckoning SHFE 1602 lead will fall below RMB 14,000/mt due to selloffs. SHFE 1603 lead is expected to fall to RMB 13,200/mt. China’s manufacturing and non-manufacturing PMIs released on Monday both fell short of market expectations, which will weigh on lead price.