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SMM Lead Market Morning Review (2014-6-5)
Jun 5,2014 10:00CST
price review forecast
Source:SMM
LME lead prices are expected to move between USD 2,100-2,120/mt, while the most active SHFE 1408 lead contract is set to hover between RMB 13,950-14,050/mt.

SHANGHAI, Jun. 5 (SMM) – LME lead prices overnight trended lower after starting at USD 2,132.5/mt, and fluctuated largely between USD 2,120-2,130/mt during the Asian trading session. The metal extended losses during European and US trading hours due to a series of negative macroeconomic news, and closed down USD 26.8/mt at USD 2,107.3/mt. Traded volumes gained 2,120 lots to 5,725 lots, while positions added 685 lots to 130,648 lots. The latest LME lead inventories held flat at 190,425 mt.

Lead for August delivery became the most active contract on the Shanghai Futures Exchange on Wednesday, with no traded volumes reported during Wednesday’s night session. The SHFE 1407 and 1409 lead contracts both fell RMB 10-20/mt, and transactions were thin for these two contracts.

In China, an investigation into copper and aluminum financing irregularities at the port of Qingdao raised further concerns over the country’s metals financing practice, weighing down base metals prices.

The euro zone’s final composite PMI for May was revised down to 53.5, lower than the preliminary reading and April’s level. The single currency bolc’s final GDP grew 0.2% QoQ in the first quarter, slowing down from the final quarter last year. These negative economic data, combined with soft inflation released Tuesday, will enhance expectations for the European Central Bank to unveil accommodative monetary policy.

Meanwhile, US ADP jobs report showed that a total of 179,000 new jobs were created in May, the smallest rise since January and that April’s figure was revised down to 215,000 from 220,000. The disappointing jobs report is expected to put a damper on US nonfarm payrolls due for release on Friday. In addition, the country’s ISM non-manufacturing PMI scaled a fresh 9-month high of 56.3 in a sign that growth in the US service sector gathered pace. The sub-index for new orders also rose to its highest since January 2011.

The US dollar index advanced 0.17% to close at 80.67. The euro eased 0.21% against the US dollar. Major stock indices across the world were mixed. LME base metals ended down, except for nickel.

Concerns over copper financing irregularities in Chinese port of Qingdao should continue to put downward pressure on base metals prices on Thursday. LME lead prices are expected to move between USD 2,100-2,120/mt, while the most active SHFE 1408 lead contract is set to hover between RMB 13,950-14,050/mt. In China’s physical lead markets, traded prices should be in the RMB 13,850-14,000/mt range on Thursday.


 

LME lead prices
SHFE lead prices
physical lead prices

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