SHANGHAI, Sep. 13 (SMM) – SMM survey of 30 Chinese lead smelters indicates that 40% of them see LME lead to fall below the 40-day moving average and test support at the 60-day moving average this week and SHFE 1610 lead to test support at RMB 13,500/mt. US stocks and treasury bonds hit the largest decline last Friday since UK’s EU referendum and European stocks dropped across the board. The VIX, a trademarked ticker symbol for the CBOE Volatility Index, surged by 40%. Commodities in China suffered sell-offs on panic and commodity prices all dropped. As such, bearishness will prevail in market for the near future. Also, lead supply is expected to grow from August with operation restarts at smelters. On the demand side, spot trading trends to be quiet in China’s domestic market with end of peak-demand season for battery sectors and volatile SHFE lead prices. Downstream buyers will watch from the sidelines.
35% market players expect LME lead to bounce back to above USD 1,900/mt this week and SHFE 1610 lead to rise to RMB 14,200/mt. Concentrate supply remains tight and TCs for domestic concentrate slip further. SHFE lead swing widely while cargo holders hold offers firm, which will lend support to SHFE lead in the short run.
The remaining 25% investors predict that lead prices will remain at current levels this week.