SHANGHAI, Mar 20 (SMM) – Spot lead prices are likely to stay rangebound with support at the 18,000 yuan/mt level and resistance at the 19,000 yuan/mt level as both supply and demand remain weak, SMM expects.
Spot prices continued to edge down since the start of March. SMM assessed 1# lead at 18,550 yuan/mt as of Monday March 19, down 700 yuan/mt from the end of February.
Supply remained weak given maintenance, limited production and slow recovery across smelters.
Overall output is likely to fall 30,000 mt in March as most primary lead smelters undertake maintenance works and as the haze in north China limit production. Small-scale secondary lead smelters maintained relatively low operation rates in anticipation of weak consumption and as profits were slim. Secondary lead traded flat against 1# lead.
As mines resumed regular production, adequate supplies of lead concentrate saw treatment charges (TCs) in some areas climb up to 1,400-1,600 yuan/mt.
Demand remained weak as destocking fell short of expectations and as production in north China was limited. Given that March and April are the traditional low season for the lead-acid battery market, traders remained bearish on consumption and held back from buying. This led to low operation rates at lead-acid battery plants.
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