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SMM Lead Market Morning Review (2014-3-3)
Mar 3,2014 09:55CST
price review forecast
Source:SMM
LME lead prices are expected to move between USD 2,120-2,145/mt, and the most active SHFE 1404 lead contract price is forecast to fluctuate between RMB 13,850-13,920/mt on Monday.

SHANGHAI, Mar. 3 (SMM) – Despite a steep fall in the US dollar index, LME lead prices just fell slightly to USD 2,120/mt after opening at USD 2,145/mt, and finally closed down USD 7/mt or 0.33% at USD 2,132/mt. Trading volumes shrank by 955 lots to 3,675 lots, positions gained 1,094 lots to 126,261 lots, and LME lead inventories shrank 200 mt to 202,225 mt.

SHFE 1404 lead contract prices started at RMB 13,935/mt in last Friday’s night session, and hovered most of the trading session around RMB 13,890/mt, except for two lots trading at RMB 14,095/mt. The contract prices later dipped to a new low of RMB 13,850/mt since late 2013, and finally ended down RMB 10/mt at RMB 13,880/mt.

Last Friday, good news was heard from Europe, with CPI growing 0.8% YoY during February, beating the 0.7% rise expected. Core-CPI in the currency union rose 1% during the same period, higher than the 0.8% estimate. Hence, market anticipates that the ECB may raise interest rate at the next policymaking meeting. In Germany, January retail sales increased 2.5% on the month, significantly higher than the 1% growth analysts had expected and staging its biggest rise since February 2007.

In the US, GDP growth for Q4 2013 was revised down to 2.4%, missing the 2.5% forecast. The euro thus climbed 1.38% against the dollar.

In other vital news, political crisis in Ukraine continued to escalate. Russia’s parliament has approved President Vladimir Putin’s request for Russian forces to be used in Ukraine “until the normalization of the political situation in the country”. US President Barack Obama warned Russia that it should rethink its military intervention in Ukraine, and US government officials said Obama is considering not attending June’s G8 Summit in Sochi, Russia, and reassessing economic relations between US and Russia.

In China, the official manufacturing PMI was reported at 50.2 in February, an eight-month low. China’s foreign trade in goods hit USD 4.16 trillion in 2013, making it the largest goods trading nation in the world. Its exports in goods totaled USD 2.21 trillion in 2013, and imports were USD 1.95 trillion.

European and US stocks were mixed last Friday. All base metals on London Metal Exchange, except for nickel, closed lower. The weaker US dollar may lend some support to SHFE base metals.

China’s official manufacturing PMI released last Saturday fell to a fresh 8-month low, but will not significantly affect lead prices as markets have digested the economic data in advance. The ongoing political crisis in Ukraine dented investors risk appetite, but the slumping US dollar index is expected to support base metals prices. LME lead prices are expected to move between USD 2,120-2,145/mt, and the most active SHFE 1404 lead contract price is forecast to fluctuate between RMB 13,850-13,920/mt on Monday. In China’s physical lead markets, mainstream traded prices will be between RMB 13,750-13,900/mt.
 

LME lead prices
SHFE lead prices
spot lead prices

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