Lead Prices to Continue To Consolidate Rangebound amid Inventory Accumulation And Cost Factors

On the SHFE lead front, the traditional peak season for lead-acid battery has not set in, and the supply is expected to increase in August, growing expectations of stock accumulation of lead ingots. On the other hand, the supply of lead concentrate and scrap is tight, which will bolster prices. That should give strong support to lead prices. As such, lead prices look set to move rangebound in the near term. The market has recently paid a lot of attention to the application of lead in greenhouse superconducting materials. However, this material is still in laboratory testing stage, and it is too early for practical application. The most active SHFE lead contract prices are expected to stand between 15,800-16,050 yuan/mt this week. Spot prices are expected to move between 15,600-15,850 yuan/mt.

In terms of primary lead, supply is expected to change little this week. Deliverable cargoes will be transferred to the warehouses this week due to the approaching delivery of the SHFE August lead contract. Spot discounts are expected to remain flat from this week. In terms of secondary lead, the new production capacity will be put into operation soon, and the price of battery scrap continued to rise. Hence supply and cost will both rise. This, coupled with regional supply differences, will widen the price differences of secondary lead.