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[SMM monthly selection] April lead ingots are expected to turn into small accumulations of spot lead or fall below 24th again
Apr 13,2020 15:15CST
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Source:SMM
The content below was translated by Tencent automatically for reference.

SMM4 13: in March, lead prices as a whole showed a "V" trend. Due to the control of the domestic epidemic situation, the downstream enterprises of lead basically returned to work in an all-round way, and the background of going to the warehouse promoted the rise of spot lead, while the outbreak of overseas epidemic situation caused the contract of lead main force 2005 to fall below the two levels of 14000 and 130 million / ton one after another. the lowest is 12620 yuan / ton, directly approaching the cost line of the mine.

At present, in April, the consumption performance of the lower reaches of lead is general, entering the off-season of traditional consumption, coupled with the crackdown on market consumption power by the epidemic this year, exports continue to be blocked, lead battery enterprises are generally accumulating, and there is a tendency to reduce production. Support for follow-up lead prices is limited. Overall, it is expected that in the middle and late April, lead ingots will change from storage to small accumulation, spot lead may fall below 10, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000.

Selected contents of monthly report

The following hot spots should be paid attention to in the follow-up lead market:

First, the overseas epidemic situation has not yet been effectively controlled, which is still a major uncertain factor. Overseas outbreaks, on the one hand, continue to crack down on the global economy, although countries have introduced a number of policies to boost the economy, but before the epidemic is brought under control, it is still the primary negative factor. On the other hand, as far as lead fundamentals are concerned, it is mainly reflected in the import of mines and the export of batteries, and both supply and demand decline.

Second, the profit of recycled lead will be repaired, the enterprise will resume work and the new expansion will be released. As an alternative product, recycled lead interferes directly to the band of lead price. In April, recycled lead resumed production and new expanded production capacity was gradually released, and the month's output doubled month-on-month, and is expected to reach a level of more than 200000 tons. As of April 10, the transaction price of recycled refined lead has reached 150-100 yuan per ton of electrolytic lead. According to historical observation, the price difference between recycled refined lead and primary lead has reached 200 yuan / ton, and lead consumption will obviously turn to recycled lead.

In March and April, the lead battery market entered the traditional consumption off-season, coupled with the crackdown on market consumption power by the epidemic this year, exports continued to be blocked, lead battery enterprises generally accumulated storage, and there was a tendency to reduce production, and support for follow-up lead prices was limited.

Of course, the "tax cut (rumored earlier that VAT is expected to be cut by 1-2%)" still needs to be followed in April, waiting for the two sessions to be held.

Overall, it is expected that in the middle and late April, lead ingots will change from storage to small accumulation, spot lead may fall below 10, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000, 000.

Lead battery: in April, due to the relatively large production capacity of lead battery enterprises in Hubei, the normal production time was less than 2 / 3 in March and the whole month in April. The operating rate in this area is expected to rise month-on-month. However, in view of the outbreak of the overseas epidemic, from the European and American markets to the Southeast Asian markets, the export of batteries such as cars, communications, and motorcycles was restricted, and export enterprises were either canceled their orders, or because they could not be transported, and the finished products were passively accumulated, and some enterprises began to reduce the operating rate of production lines. In addition, the end of the electric bicycle battery market consumption downturn, the opening season consumption expectations can not be fulfilled, SMM expects the lead battery operating rate in April may show a downward trend, the decline is expected to be 2-3 percentage points.

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