SHANGHAI, Jun. 14 (SMM) – SMM survey of 30 Chinese lead smelters reveals that 20% of them predict that LME lead will grow above USD 1,730/mt this week and SHFE 1608 lead will break through RMB 13,000/mt.
Economic figures from US are mixed recently and this slightly weakens expectation for rate hike, boding ill for US dollar. Zinc prices extend gains and LME lead may follow zinc prices up. Concentrate supply remains tight and some smelters report troubles in sourcing raw materials. Scrap battery supply is also limited. As such, supply tightness will support lead prices.
20% investors see LME lead to fall to USD 1,660/mt this week and SHFE 1608 lead to test support at RMB 12,640/mt. In China’s spot market, trading activities remain weak after China’s Dragon Boat Festival and this fuels doubts about whether there will be high demand season this year. Inventories at downstream battery makers are large and some producers extend sales promotion, which however, is not that effective. Lead prices post rallies currently but fundamentals are still poor.
The remaining 60% industrials insiders expect lead prices to move at current levels this week with LME lead around USD 1,680-1,730/mt, SHFE 1608 lead between RMB 12,750-12,900/mt and spot lead between RMB 12,650-12,800/mt. LME lead is struggling around USD 1,700/mt for many days and will be still sensitive to movements of US dollar index and LME zinc. Demand for spot lead is pessimistic in China while smelters start cutting operation.