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MCX Lead futures initially traded bearish during the May month owing to falling demand in the Asian countries due to rise in covid-19 cases including Japan. Moreover, sentimentally decline in MCX prices had been witnessed in the month of May due to lower demand in the Indian market, although the infrastructure and construction sector were continued to function. By 3rd June, MCX Lead prices closed at Rs.169.75/kg, lower by 3.36% compared to closing of Rs.175.64/kg reported on 30th April.

Looking forward for the coming month, we expect MCX Lead futures to trade bearish as the China has reduced the industrial usage due to extremely higher prices and price control in various agricultural and non agricultural commodities. Although world wide, positive economic data is being reported in manufacturing and non manufacturing sectors on a monthly basis, but then, extreme usage is still being capped amid uncertain demand in the ongoing pandemic situation. Australia’s economy has majorly opened, however, situation in Peru, Mexico and Russian continues to remain dull with lower usage of raw materical. As per International Lead and Zinc study Group (ILZSG), global refined lead production for the month of Mar’21 has reported at 1032.8 thousand metric tonnes(MT), higher by 9.77% compared to previous month's production of 940.8 thousand metric tonnes. On the other hand, metal usage during Mar’21 has been reported at 1056.8 thousand tonnes, lower by 6.47% compared to previous month's usage of 919.4 thousand tonnes. Mining activities in South America is expected to improve in the coming months with easing Covid-19 cases especially in Peru and Mexico countries. Hence, we expect bearish trend in MCX Lead futures for the month ahead.

After a long bullish rally, the lead prices witnessed some correction form the higher levels. It has faced immediate resistance of upper band of Trendline & prior supply zone, which indicates a bearish reversal in the counter for medium term. In addition, the price has settled below the upper Bollinger Band which also supports to the bearish momentum. Moreover, an oscillator Stochastic RSI suggested negative crossover, which is again a downside confirmation. Furthermore, In LME division lead has also faced strong resistance of 2259. Hence, based on above technical structure one can initiate a short position in MCX Lead (Jun) future at CMP 169.60 or a rise in the price till 171 levels can be used as selling opportunity for the downside target of 156. However, the bearish view will be negated if MCX Lead (Jun) future close above the resistance level of 177.

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