SHANGHAI, Aug. 15 (SMM) – SMM survey of 30 Chinese lead smelters reveals that 40% of them see LME lead to drop below USD 1,800/mt to the 60-day moving average this week and SHFE 1609 lead to fall below the 40-day moving average and test support at the 60-moving average.
Poor reading of China’s economic figures released last Friday boosts bearishness in market. Additionally, technical side is also negative for SHFE lead.
Approximately 20% market players in the survey predict that LME lead should rise to USD 1,851.5/mt this week and SHFE 1609 lead will rebound above RMB 13,800/mt. Concentrate supply remains tight. Environmental protection inspections have not come to an end yet, which are believed to be prolonged in some regions. As such, operating rates at refined and secondary refined lead smelters will be damped, tightening market supply. Moreover, cargo holders holds back sales for higher prices, which will also lend support to SHFE lead. Additionally, battery producers in Hangzhou and neighboring areas are expected to shut down for the coming G20 Summit in Hangzhou. Battery producers will thus start building stocks ahead of schedule this week. Hence, operating rates at battery makers will rise further, which should boost lead price.
The rest 40% market players surveyed expect LME lead to stable at USD 1,820/mt this week and SHFE 1609 lead will fluctuate at RMB 13,500/mt.