SHFE lead prices dipped last week. Spot quotes were firm. LME lead opened at $2,109/mt last week, and then skyrocketed during the day. The contract fell at the end of the trading and closed below the five-day moving average. In the next few days, the contract met resistance at the five-day moving average and inched lower.

As of 5:00 pm CST on Friday, LME lead prices closed at $2,063.5/mt, a weekly drop of 2.16%. Last week, the SHFE 2304 lead contract price opened at 15,310 yuan/mt. On Wednesday, it opened sharply lower and then moved lower, closing at 15,155 yuan/mt, down 0.92%.

In the spot market, SMM #1 lead prices fluctuated between 15,050-15,100 yuan/mt last week. According to SMM research, the orders of downstream battery companies are expected to weaken in March. This, combined with lead prices hovering at lows, kept many downstream enterprises cautious in purchasing lead ingot. The spot supply in Henan was relatively ample at the beginning of the week. Discounts of lead were 230-200 yuan/mt against the SHFE 2203 lead contract or 120-70 yuan/mt against the SMM #1 lead. Influenced by maintenance at secondary refined lead smelters and delivery preparations, smelters in Henan mainly ensured supply for long-term contracts, and there were few offers for small orders.

The tight spot supply from smelters in Hunan and Jiangxi has not eased. Smelters still quoted with premiums of 0-75 yuan/mt against SMM #1 lead. Discounts in Yunnan narrowed slightly to 220-200 yuan/mt after lead prices fell. In the trade market, the discounts under warrants in Jiangsu, Zhejiang and Shanghai narrowed to around zero near the week’s end, and most of the sellers were reluctant to sell, muting spot trades.