70% China Lead Smelters Bullish towards Lead Prices This Week, SMM Survey

SHANGHAI, Aug. 2 (SMM) – SMM survey of 30 Chinese lead smelters reveals that 70% of them are optimistic over lead prices this week. They see LME lead to challenge USD 1,900/mt and SHFE 1609 lead to hit a new high of RMB 14,275/mt for the year.

SHFE Lead to Outperform LME Lead Next Week, SMM Predicts

Many secondary lead smelters shut down owing to environmental factor and this will shift demand to refined lead. Operation cut or halt at domestic refined lead smelters remain unchanged because of tight concentrate supply. Goods released by Henan-based large smelters reduce significantly in market and this will boost bullishness. Cargo holders will thus hold back sales and push up lead prices. Also, US flash GDP growth was 1.2% in Q2, far missing the 2.5% growth, sending US dollar down a lot. Expectation for a rate hike by US Fed cools further, which will lend support to lead prices. 

27% market players believe that lead prices will remain at current levels this week with LME lead at USD 1,850-1,860/mt, SHFE 1609 lead around RMB 14,000/mt and spot lead at RMB 13,650-13,850/mt. Resistance met by LME lead remains at the 20-day moving average. Technical side is upbeat for SHFE lead but limited supply curbs trading in China’s domestic market.

The rest 3% investors are pessimistic over lead prices this week. SHFE 1609 lead continues gains recently and nearly approaches year’s best level. This triggers worries that SHFE lead may fall back from highs with exit of longs.