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SMM Lead Market Morning Review (2014-3-14)
Mar 14,2014 10:01CST
price review forecast
LME lead prices are expected to move between USD 2,000-2,030/mt, and the most active SHFE lead contract is set to fluctuate between RMB 13,520-13,620/mt.

SHANGHAI, Mar. 14 (SMM) – LME lead prices overnight started at USD 2,044/mt, and then fluctuated between USD 2,040-2,050/mt in Asian trading hours due to mixed news out of China. During European and US trading sessions, LME lead prices fell to a low of USD 2,016.25/mt, and closed down USD 18.5/mt at USD 2,022/mt, weighed down by worries over China’s metals demand.

All eyes remained on China on Thursday. A string of economic data released overnight continued to depress markets. China’s fixed asset investment, industrial output, and retail sales all missed forecasts, a sign of the nation’s accelerating economic slowdown. Faced with these disappointing economic reports, market participants are calling for stimulus measures by the government. However, comments by the People’s Bank of China (PBOC) governor Zhou Xiaochuan and Premier Li Keqiang reveal the Chinese authorities still have high tolerance towards some slowdown in the world’s second largest economy. In this context, possibilities will be rather low that the PBOC will cut the amount of cash banks must keep as reserves.

In the US, the number of Americans applying for first-time jobless benefits fell to 315,000, a bigger fall than expected and the lowest level since November 2013. Retail sales beat expectations to grow 0.3% MoM during February, the first monthly gains since three month ago, indicating US economy and labor market are gradually improving. US government’s February budget deficit totaled USD 193.5 billion, exceeding forecasts. In addition, the US and European Union will reportedly cancel bilateral tariffs. These positive economic data failed to give a boost to market confidence, however. Goldman Sachs thus lowered its forecast for US Q1 GDP growth to 1.5% from 1.7%. Major three US stock indexes all closed significantly lower.

In Europe, France’s February CPI rose more than expected by 0.9% from a year ago. European Central Bank (ECB) President Mario Draghi later claimed the ECB is poised to introduce non-standard measures to tackle deflation. The easing comments sent the euro down 0.26% against the dollar, denting the single currency’s investor interest in buying base metals.

The US dollar index eased 0.01%. Asia-Pacific stocks were mixed, while major European and US stocks closed lower. LME base metals prices, except for LME nickel prices, all finished with losses.

Markets are still plagued by worries over slowdown in China’s economy, while the Crimean referendum scheduled on Sunday will also add to uncertainties on Friday. LME lead prices are expected to move between USD 2,000-2,030/mt, and the most active SHFE lead contract is set to fluctuate between RMB 13,520-13,620/mt. In China’s physical lead markets, traded prices will be RMB 13,550-13,700/mt on Friday.


LME lead prices
SHFE lead prices
spot lead prices

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