SHANGHAI, Aug 3 (SMM) - Overseas stocks continued to decline last week. LME lead inventories fell 2,050 mt on the week as of July 30 to 60,400 mt. LME lead maintained Backwardation structure. LME cash to 3-month lead contract maintained high premiums of $35.5/mt as of July 29.
Worsening Covid-19 pandemic remains as the market focus. LME lead prices are expected to increase amid high premiums. SHFE lead faced upward pressure due to rising stocks and release of new production capacity. LME lead is expected to move between $2,330-2,400/mt, and the most-traded SHFE lead contract is expected to stand at 15,800-16,250 yuan/mt this week.
Spot prices are expected to stand at 15,550-16,000 yuan/mt this week; the lead-acid battery consumption is likely to increase. But downstream producers restocked on rigid demand. Primary lead supply is expected to stabilise. Smelters have no intention of shipping cargoes at discounts in terms of small orders, except for long-term shipping. Spot discounts are likely to be unchanged, with deliveries likely to dominate. Secondary lead supply is expected to increase as new production capacity is about to release. Price spread between refined lead and lead scrap is likely to increase if lead prices increase.