56% China Lead Producers Expect Lead Prices to Stabilize This Week, SMM Survey

SHANGHAI, Feb. 16 (SMM) – 56% of Chinese lead smelters see lead prices to move in current range this week with LME lead between USD 1,800-1,850/mt and spot lead around RMB 14,000/mt.

Few investors enter market immediately after Chinese New Year holiday and even though cargo holders give their price offers, few deals are expected to be done. Besides, the majority of industrial insiders believe that some smelters execute maintenance, leaving market stay quiet.

17% investors are bullish towards lead prices and they expect LME lead to challenge USD 1,800/mt this week and SHFE 1603 lead to move above RMB 14,200/mt. Weakening US dollar will support lead prices. Economic figures from US are mixed and it is uncertain whether US Fed will raise rate in March. US dollar index once hit a 4-month low of 95.236 during Chinese New Year holiday. Also, LME lead prices go up with growing long positions. LME lead headed for gains since late January. At present, positions of LME lead total 147,000, up over 20,000 from late January. Additionally, spot supply remains insufficient in China. Most smelters built some stocks during Chinese New Year holiday but they have to supply them to term buyers, leading to few spot goods flowing into market. And lots of smelters plan maintenance in February. Positions stay as high as 20,000 on SHFE lead market, supporting lead prices in near term.

 27% industrial insiders note that LME lead will fall to USD 1,800/mt this week and spot lead prices will drop to RMB 13,800/mt. Downstream lead-acid battery makers show little buying interest after holiday, curbing lead demand. Moreover, lead prices posted large gains before holiday, fueling likelihood that lead prices will fall back.