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Most China Lead Smelters Pessimistic over Lead Prices This Week, SMM Survey

iconApr 6, 2016 08:56
Source:SMM
About 63% of 30 Chinese lead producers surveyed by SMM anticipate that LME lead may fall to USD 1,680/mt and SHFE 1605 lead will likely drop to RMB 13,000/mt.

SHANGHAI, Apr. 6 (SMM) – About 63% of 30 Chinese lead producers surveyed by SMM are bearish towards lead prices this week and they anticipate that LME lead may fall to USD 1,680/mt and SHFE 1605 lead will likely drop to RMB 13,000/mt.

See SMM Price Forecast, Please Click:Little Downside Room in Sight for LME Lead Next Week, SMM expects

Motive and ignition batteries remain in slack season and downstream battery makers thus report shortage of orders. This will cut demand for lead. One battery maker noted that orders for April register declines from March and term purchase will be enough for their daily production. Therefore, those producers will purchase limited spot lead. Additionally, growing consumption of secondary refined lead hit demand for primary lead. Despite weakening of price edge of secondary refined lead, downstream buyers still more favor them.

37% respondents expect lead prices to move at current levels this week with LME lead struggling around USD 1,720/mt and spot lead hovering between RMB 13,300-13,500/mt. US Fed officials hold mixed attitudes towards rate hike pace and dovish tone of speeches delivered by Yellen makes US dollar fluctuate at lows. But lead prices will likely get limited support from this. Also, supply diverges in different regions. Supply is sufficient in Henan and Anhui with inventories pile-up at local smelters. But Yunnan-based smelters report unsteady production because of maintenance and power use restriction. Three companies, namely Jincheng Chengyuan Smelting, Hechi Nanfang Nonferrous Metals Group and Hechi Xinhua Smelting, perform maintenance. Hence, limited goods will be released from the companies. Goods in Yunnan and Guangxi usually flow into Guangdong and hence falling supply in the two regions allow lead prices in Guangdong hold firm, which were on par with and even higher than prices in Shanghai in the past half month. Technically, SHFE lead slipped rapidly to RMB 13,110/mt last week but now struggle around the 60-day moving average with exit of shorts. 


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SMM survey

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