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SMM Lead Market Morning Review (2014-6-19)
Jun 19,2014 09:33CST
price review forecast
Source:SMM
LME lead prices are set to hover between USD 2,105-2,130/mt, and the most active SHFE 1408 lead contract is expected to move between RMB 13,970-14,060/mt on Thursday.

SHANGHAI, Jun. 19 (SMM) – LME lead prices overnight fluctuated largely between USD 2,110-2,130/mt, and closed down USD 2.25/mt, or 0.11%, at USD 2,118.75/mt. Trading volumes shrank 674 lots to 2,913 lots, and positions contracted 3,609 lots to 124,027 lots. Meanwhile, the LME lead inventories decreased 300 mt to 192,575 mt.

The most active SHFE 1408 lead contract continued to hover around the RMB 14,000/mt mark during Wednesday’s night session, with 50 lots traded. During the night session, trading volumes totaled 62 lots.

The US Federal Reserve kept its benchmark interest rate unchanged at 0-0.25% and curtailed bond purchases to USD 35 billion per month from USD 45 billion at the mid-day interest rate meeting, which dovetailed with market expectations. The US Fed indicated that US inflation is expected to rise to the 2.0% target with a rebound in the country’s economic growth and improving labor market. However, the Fed unexpectedly cut its outlook for US 2014 economic growth from 2.8%-3.0% to 2.1%-2.3% and announced to maintain a low interest rate in the long run, weighing down the US dollar.

Meanwhile, the Ukrainian authorities will cease fire unilaterally in the east regions of Ukraine to encourage rebels to disarm and facilitate the exit of mercenaries. The Ukrainian Prime Minister revealed that the government would grant amnesty to those who lay down their arms and did not commit serious crimes. In Iraq, the Sunni Muslim insurgents launched an attack on the country’s biggest oil refinery at Baiji north of Baghdad, resulting in a production halt at the facility. In response, crude oil prices went up.

Moreover, the Chinese Premier Li Keqiang stated during a visit to Britain that the central government would ensure a GDP growth at or above 7.5% this year to create sufficient jobs, while keeping CPI below 3.5%. Data from the National Bureau of Statistics (NBS) showed that prices for new residential real estate in only 15 cities among 70 major medium and large cities rose in May, the smallest number since May 2012.

Most European and US stock indices rose. LME copper, aluminum, lead, and zinc all closed higher.

Investors should keep an eye on the US Philadelphia Fed’s manufacturing index for June and initial jobless claims for last week. Optimistic statements by the Chinese Premier should continue to lend solid support to base metals prices.

LME lead prices are set to hover between USD 2,105-2,130/mt, and the most active SHFE 1408 lead contract is expected to move between RMB 13,970-14,060/mt on Thursday. In China’s physical lead markets, traded prices should hold steady between RMB 13,850-13,950/mt amid tight liquidity and soft consumption.
 

LME lead prices
SHFE lead prices
physical lead prices

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