56% Lead Smelters in China Expect Stability for Lead Prices This week, SMM Survey

SHANGHAI, Mar. 8 (SMM) – SMM survey of 30 Chinese lead smelters finds that 56% of them see lead prices to move in current range this week with LME lead moving between USD 1,850/mt and SHFE 1605 lead ranging RMB 13,700-14,000/mt. 

See SMM Price Forecast, Please Click:LME Lead to Challenge $ 1,850 Next Week, SMM says

Downstream battery makers show low purchase interest but overall sentiment turns positive in commodity market, containing falls for lead prices. Besides, SHFE lead moved above moving averages and upward momentum for large gains is lacking after challenging RMB 13,950/mt for several times. The contract fell back immediately after hitting RMB14,000/mt last Friday.

17% market players expect LME lead to rise above USD 1,880/mt this week and SHFE 1605 lead to stabilize at RMB 14,000/mt. Attention is turning to China’s NPC & CPPCC sessions, supply side reform and SOE reform. Moreover, anticipation for more pro-growth measures continues in China, boosting base metals prices. US non-farm payrolls grew 242,000 people in the week ending March 3, beating forecast but US dollar index fell back. Markets expect dollar to stay low this week, supporting lead prices. Besides, inventories of deliverable good are low. SHFE lead inventories totaled 11,887 mt, up 26 mt on the weekly basis, according to SHFE data last Friday.

The rest 27% industrial insiders are bearish towards lead prices this week and they believe that LME lead will drop below USD 1,800/mt and SHFE 1605 lead slip to RMB 13,550/mt. Downstream demand remains weak after entering slack season in March. Price gap between secondary refined lead primary lead remains at RMB 200-300/mt, shifting most buyers to the former. Additionally, orders turn limited at some downstream large producers after satisfying bid orders following 2016 Chinese New Year holiday, weighing on their operating rates. This leads to reduction in demand for lead.