Price Trend

Lead market (10.07-10.12) rose this week and then fell. The average price of domestic market was 16993.75 yuan/ton at the beginning of the week and 16887.50 yuan/ton at the end of the week, with a weekly decline of 0.63%.

On October 11, the lead commodity index was 102.78, unchanged from yesterday, down 23.30% from the cyclical peak of 134.01 points (2016-11-29), and up 37.72% from the lowest point of 74.63 on March 19, 2015. (Note: Period refers to 2011-09-01 to date).

II. Market Trend Analysis

Domestic market: This week, Shanghai lead high declined trend, the price range between 16800-17280 yuan/ton shocks, spot prices followed the trend of Shanghai lead, early rush back later, this week, the mainstream spot lead trading range of 16850-17150 yuan/ton, before National Day, most manufacturers have fully stockpiled, after the festival delivery is limited, mainly to consume inventory. As of Friday, the mainstream quotation of domestic lead general brands will be 30 yuan per ton of the 1911 contract to Pingshui.

Domestic events:

ILZSG: The global lead shortage in July was 4,200 tons: London, September 18, 2008. According to data released by the International Lead and Zinc Research Group (ILZSG), the global lead supply gap narrowed to 4,200 tons in July and 13,100 tons in June. In the first seven months of 2019, the global lead supply gap expanded to 47,000 tons, compared with a shortage of 35,000 tons in the same period last year.

WBMS: The global lead supply gap in January-July 2019 is 177,000 tons: London, September 18, 2019. According to data released Wednesday by the World Bureau of Metal Statistics (WBMS), the global lead supply gap in January-July 2019 is 177,000 tons and that in 2018 is 265,000 tons. By the end of July, the total stock was 27,000 tons lower than that at the end of 2018. Unreported inventory changes are not included in consumption statistics. From January to July 2019, global refined lead production (primary and recycled) was 7.329 million tons, an increase of 11.70% over the same period last year. China’s apparent demand is estimated to be 3.577 million tons, an increase of 782,000 tons over the same period last year, accounting for about 48% of the global total. Apparent demand in the United States fell by 11,000 tons from January to July 2019. In July 2019, the output of refined lead was 105.27 million tons and the consumption was 105.74 million tons.

Non-ferrous industry: The market has just come back from the National Day holiday with weak performance of important economic data in Europe and the United States. The Federal Reserve is expected to further cut interest rates. The US index is hovering near the 99-point high. Domestic metal pressures are in the first place. However, with the opening of a new round of high-level trade negotiations between China and the United States, market confidence has been boosted, and domestic metal performance has recovered some of the decline.

3. Prospects for the Future Market

In the next week’s domestic and foreign economic data sets, market expectations are weak. Under the downward pressure of the global economy, the US dollar index may be under pressure. The development trend of Sino-US trade negotiations will also establish the performance atmosphere of the market, and face delivery next week. Metal products will be more led by their basic trends.