17% China Lead Smelters Optimistic over Lead Prices This Week, SMM Surveys

Published: Aug 23, 2016 09:07

Save

SMM survey of 30 Chinese lead smelters reveals that 17% of them see LME lead to rise above the 5-day moving average and challenge USD 1,900/mt this week.

SHANGHAI, Aug. 23 (SMM) – SMM survey of 30 Chinese lead smelters reveals that 17% of them see LME lead to rise above the 5-day moving average and challenge USD 1,900/mt this week and SHFE 1610 lead to stay firm and break through RMB 14,000/mt.

LME Lead to Challenge Year’s Best Next Week, SMM Predicts

US last week’s crude oil inventories reported by API and EIA were lower than forecast, which sent crude oil up to near USD 50/bbl. Lead supply remains tight at present and cargo holders hold offers firm, which allows spot goods offered at high premiums. This will also lend support to SHFE lead.

Approximately 23% market players in the survey predict that LME lead should drop below the 10-day moving average and give up all earlier gains this week and SHFE 1610 lead will drop below the 40-day moving average and test support at RMB 13,500/mt. Operating rates at small secondary lead smelters are expected to rise with easing of environmental protection inspections. Primary lead smelters in Henan, Yunnan and Jiangxi already restarted operation, which will grow market supply. Battery producers trend to cut purchase with motive battery sectors at the tail of peak season, which will weigh on lead price.

The rest 60% market players surveyed by SMM expect LME lead to stabilize at around USD 1,800/mt this week and SHFE 1610 lead will stabilize around RMB 14,000/mt. Technical side is positive for LME lead. SHFE 1610 lead is expected to fluctuate between RMB 13,800-14,000/mt for the short term with mixed fundamentals.

LME lead price SHFE lead prices Pb prices SMM survey

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

For any inquiries or to learn more information, please contact: lemonzhao@smm.cn

For more information on how to access our research reports, please contact:service.en@smm.cn

Related News

3 hours ago

Shanghai Copper Spot Prices to Remain Under Pressure Amid High Inventories and Soft Demand

Shanghai copper spot to stay under pressure tomorrow. Recent arrivals of imported copper—including Japanese brands like SRP and TAMANO-P—are weighing on spot discounts. Demand softened as end-users showed limited acceptance of higher prices. Some holiday restocking emerged, but high spot inventories cap any upside. The narrow spread between high-grade and standard-grade copper reflects subdued actual consumption. The spot discount against the 2604 contract is expected to persist.

3 hours ago

Early-Month Purchasing and Stockpiling Failed to Offset the Impact of Imports, SHFE Copper Spot Premiums Remained Under Pressure [SMM Shanghai Spot Copper]

[SMM Shanghai Spot Copper] Looking ahead to tomorrow, the Shanghai spot copper market is expected to see a phased recovery. Demand side, as a new monthly procurement cycle begins, the previously pent-up purchasing demand of downstream enterprises will be gradually released. Coupled with the stockpiling window ahead of the Qingming Festival, market inquiry activity is expected to rebound, and trading conditions may improve significantly from month-end levels, providing some support for spot discounts. From the market structure perspective, the price spread between high-quality copper and standard-quality copper has remained at a relatively narrow level, reflecting that actual consumption demand still dominates the market, while brand premiums have weakened. Supply side, imported cargoes have continued to arrive recently, and the destocking speed of social inventory in Shanghai has slowed, leaving overall circulating supply relatively ample and limiting the room for discount recovery. Overall, driven by early-month procurement and pre-holiday stockpiling, spot prices against the SHFE copper 2604 contract are expected to see some narrowing in discounts tomorrow.

3 hours ago

Market Activity Increased After the Contract Rollover, Spot Premiums Continued to Rise [SMM South China Spot Copper]

3 hours ago