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SMM Lead Market Morning Review (2014-7-3)
Jul 3,2014 09:39CST
price review forecast
Source:SMM
LME lead prices are expected to move between USD 2,190-2,220/mt, and prices for the most active SHFE 1408 lead contract are set to swing between RMB 14,100-14,200/mt.

SHANGHAI, Jul. 3 (SMM) – LME lead prices started overnight at USD 2,155/mt, and then hovered largely between USD 2,150-2,160/mt in the Asian trading session. During European and US trading hours, the metal initially fluctuated around USD 2,160/mt, and later rallied to end up USD 54.3/mt, or 2.52%, at USD 2,210.3/mt, boosted by positive US ADP jobs report. Trading volumes gained 3,554 lots to 7,184 lots, and positions shrank 197 lots to 127,796 lots. The latest LME lead stocks held flat at 193,700 mt.

Prices for the most active SHFE 1408 lead contract opened Wednesday’s night session at RMB 14,130/mt, and tracked LME lead prices higher subsequently to finish up RMB 165/mt, or 1.18%, at RMB 14,175/mt. During the night session, trading volumes totaled only 112 lots, and positions added 38 lots to 6,632 lots.

The US ADP jobs report released on Wednesday shows that the US economy created 281,000 new jobs in June, far exceeding expectations and hitting a refreshed high since November 2012. The number of new jobs recorded in May, however, was the lowest since the beginning of this year. The significant improvement in jobs creation raised market confidence towards US June nonfarm payrolls scheduled for release late on Thursday and also offset negative impact from disappointing manufacturing data made public earlier.

Meanwhile, the country’s unemployment rate is expected to hold flat in June at 6.3%, while newly added jobs in the nonfarm sectors are projected to reach 218,000, the highest level since May 2010. In addition, US Federal Reserve Chairwoman Janet Yellen stated that there was no need to increase interest rates to tackle financial instability. The accommodative comments gave a fillip to the base metals markets. The country’s factory orders for April nonetheless posted the largest fall in four months, which had a limited impact on the markets.

It was worth noting that the foreign ministers of Germany, Russia, France and Ukraine held a meeting in Berlin on Wednesday in a bid to ease tensions in Ukraine.

The US dollar index edged up 0.15%, while the euro eased 0.14% against the US dollar. Major world stock indices closed higher. LME base metals prices rose sharply across the board. Precious metals prices only staged a marginal rebound, with LME gold prices hovering at high levels, up 0.04%.

Market participants are optimistic towards the European Central Bank’s interest rate decision and US nonfarm payrolls to be released on Thursday, helping support base metals prices. LME lead prices are expected to move between USD 2,190-2,220/mt, and prices for the most active SHFE 1408 lead contract are set to swing between RMB 14,100-14,200/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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