Lead Futures Declined Last Week and Domestic Spot Prices Fell Below 15,000 yuan/mt

SHANGHAI, Feb 20 (SMM)- LME three month contract opened at $2,090 yuan/mt last Monday and fell 2.75% last Wednesday, but then rebounded last Thursday and stood at $2,058/mt as of 17:00 CST last Friday, down 1.53% from last Monday.

SHFE 2303 lead contract opened at 15,295 yuan/mt and gradually declined since last Wednesday. Primary lead smelters lowered their prices while secondary refined lead smelters held the prices firm. As such, the secondary refined lead prices were higher than SHFE lead prices. SHFE 2303 lead contract rebounded last Friday and closed at 15,170 yuan/mt, down 1.46% on the week.

In the spot market, the SMM 1# lead price stood at 14,975-15,100 yuan/mt last week. According to SMM research, although both supply and demand was increasing in the spot market, the discounts offered by smelters narrowed amid the falling lead prices. Prices offered by smelters in north and south China diverged greatly. At the beginning of last week, smelters in Henan sold at discounts of 150-100 yuan/mt against SMM #1 lead prices, then the discounts narrowed to 50-0 yuan/mt last Friday. Smelters in Hunan quoted firmly amid the low inventory and the discounts expanded from 50 yuan/mt to premiums of 0-75 yuan/mt last week. The discounts offered by smelters in Yunnan narrowed to 260-250 yuan/mt due to falling lead prices. In light of different raw material prices, the discounts of some secondary refined lead brands were less than 100 yuan/mt, and some were offered with premiums. Therefore, primary lead was more cost-effective. In the trading market, social inventory increased amid the delivery of SHFE 2302 lead contract. Warrants in Shanghai were offered in discounts of 20-0 yuan/mt against SHFE 2303 lead contract, compared to discounts of 50-0 yuan/mt in Jiangsu and Zhejiang. Approaching the weekend, warrants prices fell slightly and the transactions picked up as downstream purchased actively on dips.