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Lead Prices Are Likely to Pull Back from Highs after the CNY Holiday
Jan 27, 2022 13:00CST
Source:SMM
The base metals prices are unlikely to sustain their upside momentum amid strong expectation of interest rate hike by the Federal Reserve in March as well as the geopolitical threatens.

SHANGHAI, Jan 27 (SMM) - The base metals prices are unlikely to sustain their upside momentum amid strong expectation of interest rate hike by the Federal Reserve in March as well as the geopolitical threatens. On the other hand, lead ingot inventories are expected to rise post the CNY holiday. On the whole, the lead smelter will take shorter holidays than the downstream participants during the CNY. The large-sized primary lead smelters, mostly located in Henan, will take shifts to produce during the holiday, while other smelters will take the time to conduct maintenance. The total output during the CNY holiday is likely to drop by around 30-40%.

For secondary lead, the mid and small-sized smelters will almost all be closed for the holiday during the period from January 25 to February 15. Meanwhile, the large-sized smelters, mostly in Anhui, will take shifts to produce. Hence around 50-60% of the output will be affected by the holiday factor. The downstream participants will also take the CNY holiday during the period from January 22 to February 15, and will be closed for 5 days the shortest. Around 90% of the downstream output will be affected during the CNY holiday.

As such, the post-holiday lead ingot inventory is highly likely to rise by around 20,000 mt (especially the in-plant inventories of smelters). Nonetheless, lead prices will have support at 15,000 yuan/mt amid routine restocking post the holiday, and the lead ingots exports in February subject to orders signed in January.

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