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The most-traded June lead contract on the SHFE traded at 20,210 yuan ($3,164) per tonne as at 10.37am Shanghai time, up by 385 yuan or 1.9% from Monday’s close. Around 81,594 lots of the contract have changed hands so far this morning.
Overnight, the LME’s three-month lead price surged 3.3% and broke through the $2,400-per-tonne mark – this despite continued strength in the dollar.
Robust demand from China’s automobile sector and ongoing environmental constraints on the country’s domestic lead production continue to lend support to lead prices.
China’s vehicle sales volumes rose 11.5% year on year to 2.32 million units in April, according to data released by the China Association of Automobile Manufacturers (CAAM) on May 11.
“Authorities are clamping down on recycling plants in China, which are the source of nearly 60% of lead. The closures come amid a widening import arbitrage into China and falling inventories on both the LME and SHFE,” ANZ Research noted on Tuesday.
Lead stocks at SHFE warehouses declined 5,185 tonnes last week to reach a total of 15,458 tonnes as at May 18. Meanwhile, LME lead stocks dipped 459 tonnes to 133,275 tonnes on Monday.
The metal’s prices have also been buoyed by the shuttering of Chinese lead mines and smelters, notably in Anhui and Hunan provinces after China’s President Xi Jinping’s recent push to improve the country’s environment.
The other SHFE base metals were broadly lower, with only copper managing to eke out slight gains, while nickel was little changed.
Base metals prices
Currency moves and data releases