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[SMM analysis] lead positions in Shanghai remain high and the delivery of warehouse orders is improving slowly.
Jul 7,2020 17:26CST
translation
Source:SMM
SMM7 March 7 News: intra-day Shanghai lead 2007 contract trend is strong, once shot up to 15020 yuan / ton in the morning, and the main 2008 contract base expanded to 400 yuan / ton. As of 15Rd 00, the Shanghai lead contract closed at 14905 yuan / ton in 2007, an increase of 0.34%, and its position was 8270 tons, a decrease of 675 tons.
The content below was translated by Tencent automatically for reference.

SMM7 March 7 News: intra-day Shanghai lead 2007 contract trend is strong, once shot up to 15020 yuan / ton in the morning, and the main 2008 contract base expanded to 400 yuan / ton. As of 15Rd 00, the Shanghai lead contract closed at 14905 yuan / ton in 2007, an increase of 0.34%, and its position was 8270 tons, a decrease of 675 tons.

Comparison of three-month lead price and position in SHFE

According to the calculation of the trading day, the Shanghai lead 2007 contract is only six trading days away from the delivery date, but its current position is still above 8, 000 hands. In terms of today's position, the volume of lead ingots that need to be delivered is 41350 tons. According to data from the Shanghai Futures Exchange, the inventory of lead ingot warehouse receipts has gradually increased since the beginning of this week, with an increase of 1564 tons yesterday and 172tons today, bringing the total inventory of lead ingot warehouse receipts to 18824 tons. However, the current warehouse receipt inventory growth rate is still far lower than the volume required to hold positions, Shanghai lead 2007 contracts show signs of "soft", and the price spread may further widen every other month.

Social inventory of SMM lead ingots

In addition, as of July 3, the social inventory of SMM lead ingots in the five places is 33800 tons, with a weekly increment of more than 4000 tons, of which about 10,000 tons are imported lead. at present, domestic imported lead is not deliverable, so the deliverable goods are only around 20, 000 tons. While the current downstream lead battery market demand is weak, lead ingot spot market trading continues to be in the doldrums, electrolytic lead smelter loose single offer for the SMM1# lead price average price discount 50 yuan / ton to flat water factory, some as low as 100 yuan / ton; trade market domestic lead ordinary brand is quoted to Shanghai lead 2007 contract discount 50 yuan / ton to flat water. With regard to the expansion of the futures price spread every other month and the expansion of the spot price spread, the willingness of the holders to deliver positions has increased, and the market is also showing the trend of buying spot delivery positions one after another. it is understood that the volume of this delivery is expected to be 20-30,000 tons.

At the same time, according to SMM research, the operating rate of primary lead and recycled lead increases synchronously, and the supply of lead ingots tends to be relaxed, especially in the recycled lead plate. Since last week, the price of lead has risen sharply, the profits of recycled lead have been repaired, and the discount of recycled refined lead has expanded rapidly. as of July 7, recycled refined lead has been quoted as an average discount of 250 yuan / ton for SMM1# lead, with some as low as 400 yuan / ton. The absolute advantage of recycled lead in price has attracted a large number of downstream just need diversion, and the accumulation of electrolytic lead is expected to rise further, giving more holders room to buy cash (delivery brands). It will stimulate the transaction activity of the spot market before delivery and give the smelter the opportunity to reduce inventory pressure.

 

Focus on the development prospect and price trend of lead and zinc industry

In 2019, global trade disputes escalated, the global economy was under pressure, and central banks began a wave of interest rate cuts. At the same time, the meeting of the political Bureau of the CPC Central Committee stressed that at present and for some time to come, the basic trend of China's economic stability and long-term improvement will remain unchanged, and 2020 will also be the year when China will build a moderately prosperous society in an all-round way and the 13th five-year Plan ends. In this context, the new crown virus is rampant all over the world, and it is worth looking forward to how to achieve steady economic growth.

In terms of the lead market, the newly expanded production capacity of overseas mines has been released one after another from 2019 to 2020, but the overseas epidemic has spread and some overseas mines have been put into production and mines under construction. Where will the lead concentrate go in 2020? At the same time, new expansion projects in China's recycled lead market are springing up everywhere. What is the actual output release in 2020? Whether the cost support is effective or not, the supply of waste batteries has become the focus of the future market; and under the influence of a number of policies (such as the new national standard for electric bicycles, motorcycle purchase tax exemption, etc.), whether the subsequent lead consumption matches, and what is the trend of lead prices in 2020?

In response to the above topics, SMM will invite industry celebrities, industry professionals, enterprises from the upper and lower reaches of the industrial chain to hold the "2020 (15th) lead and Zinc Summit" in Changsha to jointly discuss the current situation and problems of the industry, as well as the future development prospects, and analyze the fundamentals and the future trend of zinc prices.

Click to sign up for SMM 2020 (15th) lead and Zinc Summit

Scan the QR code in the picture to sign up for the lead-zinc summit and fill in the personal information on the last page. The meeting staff will contact you later!

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