Sellers pre-sold spot refined lead, lead prices continued to strengthen

Last week, LME lead prices opened at $2,075.5/mt and fell to a low of $2,047.5/mt. In the middle of the week, LME lead prices rose with SHFE lead prices and climbed to $2,121.5/mt on Thursday night. US inflation data exceeded expectations, and the dollar advanced, weighing down LME lead prices. As of 16:45 CST on Friday, the contract closed at $2,098/mt, an increase of 1.06%.

The most active SHFE 2402 lead contract prices opened at 16095 yuan/mt last week, hitting a low of 16,050 yuan/mt. Tighter spot supply and stockpiling for Chinese New Year holidays pushed up the contract to a high of 16,550 yuan/mt on Friday. But accumulation of social inventory ahead of the delivery of the SHFE front-month contract lowered lead prices. SHFE lead prices closed the week at 16,325 yuan/mt, a gain of 1.68%.

In the spot market, the SMM #1 lead prices last week (January 8-12) were running at 15,900-16,200 yuan/mt. Primary lead smelters did not resumed from maintenance last week. Due to the environmental impact, the production of secondary refined lead was still unstable. The available refined lead in the spot market was still tight, and smelters in Henan, Hunan, Guangdong and other places mainly pre-sold cargoes. Smelters in Henan raised premiums to 50-150 yuan/mt over SMM #1 lead price, and the premiums in Hunan were raised to 100-200 yuan/mt over SMM #1 lead price. Smelters in Yunnan offered a discount of 230 yuan/mt. Many smelters pre-sold cargoes and spot trading improved. Last week, warrants in Jiangsu, Zhejiang and Shanghai trading markets were quoted with discounts of 10-0 yuan/mt against the SHFE 2401 lead contract. Traders reported sluggish trades under warrants despite tight spot supply. Premiums under warrants did not rise noticeably. Due to the tight supply of primary lead and the pre-sale of lead ingots, downstream companies were purchasing secondary lead from smelters that were gradually recovering. However, the supply of secondary lead was not abundant, and the quotations were also strong. At the week’s end, cargoes in Anhui were mostly offered with discounts of 50-0 yuan/mt (ex-works) against the average price of SMM #1 lead. In Henan, discounts for low-Bi lead stood at 0 yuan/mt (ex-works) against the average price of SMM #1 lead.