China’s lead prices drop on negative sentiment

Domestic lead prices across China declined for the second week over November 3-10, as falling prices of lead futures on the Shanghai Futures Exchange (SHFE) and anticipation of a supply recovery added to negative sentiment in the market, according to market sources.
As of November 10, the national price of primary lead ingot (at least 99.994%) under Mysteel’s survey had decreased by Yuan 127/tonne ($19.8/t) on week to Yuan 15,397/t including the 13% VAT. As of the same day, the average price of secondary lead (at least 99.99%) nationwide slipped to Yuan 14,300/t including the 13% VAT, down by Yuan 125/t on week.

Sentiment in the lead market has stayed negative for the past few weeks as both supply and demand were weak, according to a Shanghai-based analyst, so traders acted quickly and lowered their offering prices after noting that lead futures prices were trending down.

The most-traded lead futures contract on the SHFE for December 2021 delivery closed the daytime session on November 10 at Yuan 15,570/t, or Yuan 170/t lower from the settlement price on November 3.

On the supply side, although domestic lead smelters’ production experienced mild disruptions last week such as maintenance at a top smelter in Henan in Central China, and power line reconstruction at plants in Anhui in East China, most traders wanted to draw down their stocks at hand, Mysteel Global was told. “The traders anticipate that supplies will recover in future when power curbs are eased more substantially so they’re hoping to secure their current margins while they can,” the analyst said.

As of November 5, production among the 20 primary lead producers included in Mysteel’s survey dropped by 250 tonnes on week to 44,300 tonnes. Over the same period, output among the 30 secondary lead smelters Mysteel surveys thinned by 1,910 tonnes on week to 39,740 tonnes.

Traders’ lower prices had little effect on boosting buyers’ demand however, as they had become more cautious when prices declined. Only some with immediate need procured some refined ingot over the period, also showing a strong willingness to make transactions at much lower prices, the analyst shared.

Post time: Nov-17-2021