Spot Transactions were Poor as SHFE Lead Rose while LME Lead Fell Overnight

Published: Aug 17, 2022 10:11

Source: SMM

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Futures: LME lead opened at $2,172.5/mt last night and fell 0.94% to $2,154.5/mt, with the highest and lowest prices at $2,197.5/mt and $2,145.5/mt respectively. The open interest decreased by 529 lots to 90,386 lots from the previous trading day. The most traded SHFE 2209 lead contract opened at 15,040 yuan/mt and rose by 0.7% to end at 15,130 yuan/m, after briefly hitting the lowest point at 15,025 yuan/mt and rising to the highest level at to 15,175 yuan/mt. The open interest decreased by 2,083 lots to 51,358 lots from the previous trading day.

SHANGHAI, Aug 17 (SMM) - Futures: LME lead opened at $2,172.5/mt last night and fell 0.94% to $2,154.5/mt, with the highest and lowest prices at $2,197.5/mt and $2,145.5/mt respectively. The open interest decreased by 529 lots to 90,386 lots from the previous trading day. The most traded SHFE 2209 lead contract opened at 15,040 yuan/mt and rose by 0.7% to end at 15,130 yuan/m, after briefly hitting the lowest point at 15,025 yuan/mt and rising to the highest level at to 15,175 yuan/mt. The open interest decreased by 2,083 lots to 51,358 lots from the previous trading day.

Spot fundamentals: Chihong lead in Shanghai market quoted at 15,040-15,060 yuan/mt, in premiums of 0-20 yuan/mt over over the SHFE 2209 lead contract. Henan JINLI GOLD and LEAD Group, Henan JINLI GOLD and LEAD Group Group and Anhui Tongguan Copper Foil Group in Zhejiang market quoted at 15,040-15,060 yuan/mt, in premiums of 0-20 yuan/mt over SHFE 2209 lead contract. Cargo holders lowered the quotation as futures prices fell. The discounts quoted in discounts and remain flat from yesterday. Downstream enterprises purchased on dips. In terms of the spot market of secondary lead, smelters were less willing to quote yesterday morning and the absolute prices fell slightly. Overall, the secondary refined lead prices were in discounts of 200-150 yuan/mt over SMM 1# lead ingot prices and a few were quoted in discounts of 100 yuan/mt. The transactions were modest.

Lead price forecast: On the supply side, the supply of primary lead increased and the in-plant inventory continued to rise. However, smelters were less willing to ship and held the prices firm. The supply of secondary lead was sufficient and the in-plant inventory was high. On the demand side, as the recovery of demand was less than expected, the lead-acid battery inventory was high. Meanwhile, due to the power rationing, the operating rates fell and enterprises had less demand for lead ingot. To sum up, the supply of lead ingots was sufficient but the demand recovered slowly. Therefore, the lead prices are expected to fall.

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