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SMM Lead Market Morning Review (2014-4-16)
Apr 16,2014 09:51CST
price review forecast
LME lead prices are expected to test support at major moving averages Wednesday, fluctuating between USD 2,090-2,120/mt.

SHANGHAI, Apr. 16 (SMM) – LME lead prices overnight dipped to USD 2,091/mt after starting at USD 2,120.25/mt, but later recouped most losses to end down USD 8.5, or 0.4%, at USD 2,109.8/mt. Traded volumes added 1,144 lots to 3,958 lots, positions lost 4,680 lots to 143,272 lots, and LME lead stocks shed 100 mt to 202,300 mt.

Lousy data from China kindled market concerns Tuesday. Total financing in the first quarter dropped 9% to RMB 5.6 trillion, while new RMB lending was only RMB 3.01 trillion, a growth of 9.4%. The much-concerned M2 stood at RMB 116.07 trillion by the end of March, growing slower than the 13% expected at a rate of 12.1%, a 13-year low. Furthermore, the World Gold Council expected limited rise in China’s gold demand this year, exerting a drag on commodities, including gold and copper.

Ukrainian troops reportedly launched a “special operation” against separatists in the town of Kramatorsk in the east of the country Tuesday and the Kramatorsk airport went under control of Ukrainian military.

The US CPI rose 1.5% in March, beating the 1.4% expected and hitting the highest since last June. ZEW Indicator of Economic Sentiment for the euro zone edged lower from March’s 61.5 to April’s 61.2, with the indicator tracking current economic situation improving from -36.7 to -30.5. ZEW Economic Sentiment for Germany came in lower than the 45 forecast at 43.2 in April, down for the fourth month straight. The current economic situation indicator, however, hit its highest since July 2011 at 59.5.

US stocks rose across the board, while European equities mostly dropped. LME base metals all closed lower.

Investors should keep an eye on China’s Q1 GDP, March retail sales, industrial output, and urban fixed asset investment all due for release Wednesday. The National Energy Administration announced early Wednesday that China’s electricity consumption totaled in March 454.4 billion kwh, up 7.2% from a year ago. Electricity consumption was up 5.4% YoY in the first quarter of this year.

LME lead prices are expected to test support at major moving averages Wednesday, fluctuating between USD 2,090-2,120/mt, while the most active SHFE 1405 lead contract price is set to hover between RMB 13,670-13,770/mt. In China’s physical lead markets, traded prices will be mostly in the RMB 13,650-13,800/mt band Wednesday, with increasing amount of physical supply after the delivery for the nearby SHFE contract.

LME lead prices
SHFE lead prices
spot lead prices

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