SHANGHAI, May 10 (SMM) – The most-actively traded contracts on SHFE market all reported declines except lead on May 9 with losses in ferrous metals and Chinese stock markets. Will the rising momentum be sustainable for SHFE lead?
With weak consumption and growing supply, gains in SHFE lead market will not last for a long period. SMM expects operating rates at domestic lead smelters to continue growing in May while demand will fall further.
The following factors are behind the recent growth in SHFE lead:
Lead is not that eye-caching and attractive among base metals, which are usually not favored by investors. The sell-offs on SHFE market are not resulted by fundamentals and thus lead is little affected.
SHFE lead has registered small gains since the 2016 New Year holiday and this leaves little downside room for lead. Tightening supply of lead concentrate triggers anticipation for production cut at smelters, also boosting lead prices.
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