SHANGHAI, Mar. 22 (SMM) – SMM of 30 market players finds that 43% of them are bearish towards lead prices and they see LME lead to fall below USD 1,780/mt this week and SHFE 1605 lead will drop to RMB 13,400/mt.

See SMM Price Forecast, Please Click:LME Lead to Be Caught in a Dilemma Next Week

First, downstream demand stays weak. Parts of large battery producers cut purchase owing to shortage of orders; second, a growing number of downstream producers and buyers shift their eyes to secondary refined lead thanks to its price edge; third, motive and ignition battery makers enter slack season, weighing on demand for lead; fourth, lead stocks trend to grow in market. Lead smelters are active in production and many smelters restart operation in March. Refined lead production should increase above 40,000 mt in March while downstream consumption remains poor, growing inventories.

7% of industrial insiders expect LME lead to stabilize at USD 1,820/mt this week and SHFE 1605 lead challenge RMB 13,700/mt.

US Fed left its Federal fund rate unchanged at its March rate meeting and intended to scale back rate hike in 2016. This drove down US dollar. Besides, crude oil prices go up, supporting lead prices. Despite slowdown in Chinese economy, expectation for loose financial environment remains. Moreover, Chinese A-shares registered 7-day winning streaks and challenged 3,000, boosting lead prices.  

The rest 50% respondents believe that lead prices will move at current level this week with LME lead around USD 1,800/mt and spot lead at RMB 13,500-13,700/mt. Technically, movements on both LME and SHFE lead are steady recently. Additionally, positive news and downstream sluggish demand will allow lead prices to stabilize this week.