SMM Lead Market Morning Review (2013-3-20)

SHANGHAI, Mar. 20 (SMM) – LME lead prices started at USD 2,181/mt overnight and dipped to a low of USD 2,157/mt in Asian trading hours influenced by the rising US dollar index. Later, as the German ZEW index for March and the February housing starts were reported above expectations, but the euro zone ZEW index was worse than expected. Meanwhile, the proposal of imposing tax to depositors in Cyprus was rejected by its Parliament , triggering market concerns that the country may exit the euro zone. In response, non-US currencies fell sharply, but report that the European Central Bank will provide liquidity to Cyprus under the current policy framework gave a boost to the market. The mixed news drove LME lead prices to move between USD 2,165-2,190/mt to finally end at USD 2,171/mt. Trading volumes were down 3,412 lots to 4,172 lots, while positions were down 738 lots. LME lead inventories fell 1,100 mt to 274,400 mt.

The US dollar index rose above 83, and COMEX silver for May delivery closed at USD 28.84/oz.

On March 20, SHFE 1305 lead contract price is expected to move between RMB 14,400-14,550/mt, and spot lead prices in China may be RMB 14,400-14,550/mt.