SHFE Lead Finishes with Small Gains (2017-8-14)

The power rationing in Yunnan, Henan, and Hunan since July-August and the power rationing in Jiangxi and Guangxi in September are undoubtedly the current hot spots. According to a recent SMM survey, the power rationing in Jiangsu, Guangdong and other regions in China has continued. Since late September, the social inventory of lead ingots has declined due to the combined effects of losses, power rationing and environmental protection.

SMM expects lead inventory to stay low in the short term on tight supply and high consumption from downstream battery plants in June.

LME lead will fluctuate at highs between USD 2,460-2,490/mt today.

LME lead will trade at USD 2,480-2,520/mt on Thursday and SHFE 1709 lead will fluctuate at RMB 20,000-20,400/mt.

LME lead will trade at USD 2,320-2,355/mt on Wednesday and SHFE 1709 lead will fluctuate at RMB 19,200-19,400/mt.

Traders were active in selling goods, while firm offers kept downstream producers on sidelines, leading to sluggish transaction in those markets.

Motive battery supply is tight in China's market and will ease in mid and late June.

Global lead supply saw a 104,000 tonnes of deficit in the first three months of 2017, and the supply was 171,000 tonnes of deficit in 2016.

China launched the third round of environmental protection inspections in Tianjin, Shanxi, Liaoning, Anhui, Fujian, Hunan and Guizhou in 2017 after two rounds in 2016.

Aaverage operating rate at those surveyed was 56.43% in April 2017, down 6.94 percent points on a monthly basis.