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SMM Lead Market Morning Review (2014-4-17)
Apr 17,2014 09:48CST
price review forecast
Source:SMM
LME lead prices are expected to range between USD 2,125-2,150/mt, while the most active SHFE 1405 lead contract price is set to move between RMB 13,740-13,840/mt.

SHANGHAI, Apr. 17 (SMM) – LME lead prices overnight started at USD 2,112/mt, and then essentially consolidated around the opening mark in the Asian trading session. During the European and US trading hours, the metal advanced to USD 2,146/mt due to a number of positive economic data releases, and closed up USD 32.3/mt, or 1.53%, at USD 2,142/mt. Traded volumes added 1,215 lots to 5,173 lots, positions shed 3,718 lots, and LME lead stocks lost 225 mt to 202,075 mt.

Encouraging reports from China gave a boost to the market on Wednesday, with its GDP reportedly up 7.4% YoY in the first quarter, beating the 7.3% forecast. Consumption and the tertiary sector contributed largely to the economic growth. In addition, Premier Li Keqiang said the Chinese government should cut the reserve requirement ratio (RRR) for some rural banks, fueling anticipation that the RRR cut may be expanded to the whole banking sector in the future.

As for economic data from the US and Europe, US factory production rose 0.7% in March, higher than the 0.5% expected, with February’s growth revised upward from 0.6% to 1.2%. March housing starts rose to an annualized rate of 946,000, lower than the 973,000 expected. Building permits declined to 990,000 versus the 1.008 million forecast. The Fed’s Beige Book indicated that the US economy largely emerged from a weather-induced slump over the past six weeks, helping shore up the market. Fed Chief Janet Yellen reiterated that interest rates will remain low for a “considerable time” after the bond purchases end. The euro zone inflation for March was finalized at 0.5%, its lowest since November 2009.

European and US shares mostly closed higher, and LME base metals also rallied.

With no major news expected, investors should eye Thursday US initial jobless claims for last week and the Philadelphia Fed’s manufacturing index for April, and markets will continue to digest encouraging news from China. In this setting, LME lead prices are expected to range between USD 2,125-2,150/mt, while the most active SHFE 1405 lead contract price is set to move between RMB 13,740-13,840/mt. In China’s physical lead markets, traded prices should be mostly in the RMB 13,700-13,800/mt band on Thursday.
 

LME lead prices
SHFE lead prices
spot lead prices

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