SHFE and LME Lead Stocks Varied, Power Rationing Is Worth Attention This Week

SHANGHAI, Nov 1 (SMM) - This week, China, US and Europe will release the PMI data for manufacturing and service industries, most of which are expected to be positive. US will also release the ADP employment data and the October non-farm payrolls after seasonal adjustment. The Federal Reserve FOMC will announce the interest rate resolution, and Fed Chairman Powell will hold a press conference. President Lagarde and Executive Committee Member Schnabel of European Central Bank will make speeches. The 22nd OPEC and non-OPEC ministerial meeting will be held this week as well. The eased energy shortage in Europe slowed down the gains in LME lead, and the lead stocks across LME-listed warehouses dropped again. LME lead is expected to move between $2,350-2,440/mt.

The continuous power rationing and maintenance led to the production cut and suspension across the domestic primary and secondary lead smelters. The domestic social inventory of lead ingots kept falling. The restored profits of secondary lead encouraged the production and widened the discounts. SMM will monitor its impact on the lead prices. The prices of the most traded SHFE lead contract are expected to stand between 15,500-16,200 yuan/mt.

The spot prices are expected to move between 15,300-15,800 yuan/mt this week. The in-plant inventory of primary lead stood low due to the power rationing and maintenance. The smelters may hold the prices firm for small orders. The supply of secondary lead gradually resumed amid the favourable profits, but the discounts may not expand significantly this week due to the uncertain power rationing. The eased power rationing and the rising lead prices stimulated the downstream consumption. Most companies expanded the production, and the downstream purchase of the lead ingots is expected to increase steadily.