【Pb and Zn Daily】Lead price action is unclear, with zinc price fluctuating for avoiding the risk of funds out flowing

Date 9/14/2018 5:25:15 PM Source: SHMET

Spot market

Lead: Shanghai spot lead mainstream offer is at RMB18960-RMB19120/ton, up 35 yuan / ton from the previous trading day, which has a premium 60 - 220 yuan / ton compared with 1810 contract. Shanghai Nanfang brand quotation is at a level with 1809 contract, and Guangdong Nanfang brand quotation has a discount of 30 yuan / ton compared with 1809 contract; Some refinery quotation in Henan is 19175 yuan / ton; It is said that Hunan area quoted 18990-19075 yuan / ton. Close to delivery, today's price is chaotic, coupled with Friday factors, the downstream procurement enthusiasm slightly decreased, the overall transaction is not as good as yesterday.


Zinc: Shanghai spot zinc price of 0# zinc is at RMB21450-RMB21550/tonne, down RMB30/ton from the previous trading day, which is 260B to 360B compared with SHFE zinc 1810 contract. The price of 1# zinc is at RMB21390-21490/ton, down RMB30/ton from the previous trading day, having a premium of RMB200-RMB300/ton compared with SHFE zinc dominant 1810 contract. In the morning, the downstream enquiries were active, and the imported brands were more favored. The domestic ordinary zinc price quotation was higher, and some of the selected average prices were slightly discounted.

SHMET comments:

At present, the pattern of being strong n foreign market and weak in domestic market in lead prices remains the same. The equilibrium ratio of SHFE and LME is around 8.74, and the actual ratio is around 9.38. The possibility of repairing the ratio and the decline of Shanghai lead is not ruled out in the later period. Next week, it is recommended to pay attention to the data on the start-up and sales of new homes in the United States. It is expected to be better than the previous value, and with the expectation that the next US interest rate hike is approaching, the US dollar index may bottom out and form a certain restraint on lead prices. The National day holiday is coming, there is still demand for stock preparation in the downstream, and there is a certain support for the price. Combining the above-mentioned influencing factors, it is expected that the lead price will remain volatile next week, and it is recommended to be on the sidelines for the time being.


Today, the zinc price has been slightly adjusted. The domestically produced ordinary zinc ingots have reported strong performance in the premium. The downstream procurement is more popular for the cheaper imported zinc. The spot price of LME Zinc continued to expand, the profit of imported zinc continued to expand, the foreign trade market remained active, and the future import resources will continue to flow. Next Monday is the last trading day of the 1809 contract. At present, there are only 3,370 lots left in the position, involving only 8,000 tons of delivery. From the perspective of market funds, tomorrow is the weekend, SHFE zinc nearby month contract funds are out flowing. It is recommended to avoid the uncertain risk of positions holding on the weekend. 


Edited by SHMET