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SMM Lead Market Morning Review (2014-3-13)
Mar 13,2014 09:52CST
price review forecast
LME lead prices are expected to move between USD 2,030-2,060/mt, and the most active SHFE lead contract is set to fluctuate between RMB 13,600-13,700/mt.

SHANGHAI, Mar. 13 (SMM) – LME lead prices overnight rose to as high as USD 2,060/mt after starting at USD 2,054.5/mt, and then hovered around USD 2,055/mt in Asian trading hours. Affected by negative news in European and US trading hours, LME lead prices dipped to as low as USD 2,013/mt, and later recouped early losses to finish down USD 4.5/mt at USD 2,040.5/mt, boosted by bargain-hunting activity. Trading volumes gained 90 lots to 7,583 lots, positions added 1,033 lots to 133,480 lots, and LME lead inventories contracted 225 mt to 203,100 mt.

With an absence of any major news, markets overnight were still preoccupied by tensions in Ukraine. The Supreme Council (the Parliament) of the Autonomous Republic of Crimea approved on Tuesday the declaration on independent of the peninsula, which has cleared obstacles for this Sunday’s referendum to decide whether it will join Russia or not. Leaders of the Group of Seven economies, however, claimed on Wednesday they will not recognize the result of that vote. With the approach of the vote, markets become increasingly concerned about the situation in this area.

The US Senate Banking Committee released on Wednesday Stanley Fischer’s prepared testimony before the committee. The testimony shows the pace of US economic recovery is rocky and disappointing, and the 6.7% unemployment rate is still far too high. The US Federal Reserve will continue its easy monetary policies to shore up the fragile labor market if need be. No market-moving economic data was announced in the US on Wednesday. Meanwhile, the euro zone January industrial output unexpectedly fell by 0.2% MoM, but topped forecasts YoY. In addition, Fitch Ratings affirmed the European Union’s (EU) Long-term Issuer Default Ratings (IDRs) at ‘AAA’, and was relatively bullish about the outlooks on the long-term IDRs. In response, the euro rallied by 0.32% against the US dollar.

The US dollar index closed down 0.22%. Major Asian and European stocks ended lower, while US stocks were mixed, with the Dow Jones industrial average down 0.07%. LME base metals prices, except for LME lead prices, finished higher.

Increasing bargain-hunting activities will lend support to base metals prices in the wake of their sharp losses on Thursday. China’s large scale industrial added value and fixed asset investment should also be eyed given their significant impact on base metals price movement. LME lead prices are expected to move between USD 2,030-2,060/mt, and the most active SHFE lead contract is set to fluctuate between RMB 13,600-13,700/mt. In China’s physical lead markets, traded prices should hold flat between RMB 13,600-13,700 on Thursday.

LME lead prices
SHFE lead prices
spot lead prices

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