[market analysis] lead braving the wind and waves: or it may be supported around 15000 to oscillate upstream.

SMM9 March 16: after the outbreak of the novel coronavirus epidemic in 2020, non-ferrous metals rose generally, and copper, aluminum, lead and zinc rose sharply. Take 2010 lead futures as an example:

Copper rose to 53050 yuan / ton in September from 35720 in March this year, exceeding the peak of 50700 yuan / ton in 2019 and 3090 yuan / ton higher than the high price of 49960 in January this year.

Aluminum rose to 14635 yuan / ton in September from 11380 in April this year, close to the peak of 14680 yuan / ton in 2019, and 615 yuan more than the high price of 14065 yuan in January this year.

Zinc rose to 20460 yuan / ton in September from 14380 in March this year, close to the peak of 20535 yuan / ton in 2019, and 2245 yuan / ton more than the high price of 18290 in January this year.

Lead rose to 16505 yuan / ton in August from 12650 in March this year, and fell back to 15000 yuan / ton in September.

It is 2590 yuan / ton lower than the peak of 17590 in September 2019 and 435 yuan less than the high price of 15435 in January this year.

The traditional peak season of lead is from July this year to around the Spring Festival next year, macro-monetary quantitative easing, Russia novel coronavirus vaccine has been put into production and use, China, the United States vaccine will soon be on the market. With the continuous economic stimulus policies of various countries, the economic indicators of China, the United States and Europe show a V-shaped recovery, and demand is expected to continue to grow.

Under this premise, non-ferrous metals are easy to rise and difficult to fall, and lead is the most valuable investment in copper, aluminum, lead and zinc. compared with the same period last year, lead still has 2590 yuan to rise, while the most normal price difference between lead and zinc is 2000 yuan. In September 2019, zinc is 19400 yuan / ton, 1810 yuan / ton higher than lead, while today's zinc 19900 yuan / ton is 4900 yuan / ton higher than lead, and lead still has room to rise by 2900 yuan.

Below, I would like to elaborate on the supply and demand side:

Supply:

From January to August 2020, the refined lead output of the China Nonferrous Metals Association was 2.989 million tons, down 2.9 percent from the same period last year, of which primary lead increased by 2.5 percent and recycled lead decreased by 8.8 percent. In September, the three smelters in Lingnan, Western Mining and Haicheng of Zhongjin were overhauled, and the output of primary lead is expected to decrease by nearly 10,000 tons to 274000 tons.

In September, the licensed output of recycled lead was 286400 tons. In September, refined lead production was 560400 tons and consumption was 566600 tons. It is estimated that there will be a lead shortage of 6600 tons in September this year.

Although recycled lead has expanded its production capacity, the supply of waste batteries is much lower than its production capacity. after the implementation of the new solid waste law, the supply of compliant waste batteries has been reduced, and prices are easy to rise and difficult to fall. recently, some recycled lead factories have stopped production due to losses.

On September 16, the average price of non-ferrous lead was 15075 yuan / ton, and some primary lead factories stopped shipping because they could not get the raw materials.

Demand:

Electric car sales increased by 49.5% in July 2020 compared with the same period last year, and car sales rose 11.6% in August compared with the same period last year.

Car sales rose 21.93% in July from a year earlier; motorcycle sales rose 8.4% in July from a year earlier.

In July, 3401291 lead-acid batteries were exported, an increase of 8.4% over the same period last year.

In July, 12050170 other lead-acid batteries were exported, down 6.4% from the same period last year.

The operating rate of battery enterprises in August 2020: 79.5%, the operating rate of batteries in 2019 was 69.99%, and the operating rate increased by 9.51% over the same period last year.

September survey of large and medium-sized battery enterprises operating rate of 90-100%, orders have been arranged to November, battery supply exceeds demand.

Affected by the epidemic, battery enterprises generally maintain low inventory of lead ingots, coupled with the demand for reserves, the shortage of refined lead is expected to exceed 10,000 tons in September. To sum up, lead should be supported near 15000, ride the wind and waves, shock uplink!

The first target is 17000 yuan / ton.

Author: Sister Tian, Chairman of Xiamen Hua lead Import and Export Co., Ltd.

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