SHANGHAI, Jul 10 (SMM) – The significant price spread between the SHFE July and August contracts deterred traders in the spot lead market in Shanghai on July 10, SMM learned.
The spread between the two stood at 1,105 yuan/mt, after the 1808 contract closed the morning session at 19,460 yuan/mt and the 1807 contract closed at 20,565 yuan/mt. SMM assessments showed that spot 1# lead averaged at 20,575 yuan/mt, 1,115 yuan/mt higher than the 1808 contract.
After delivery, transactions with such high premiums over the 1808 contract are likely to dwindle. Traders, therefore, were keen to stand on sidelines and are expected to make some purchases when the price spread narrows after delivery.