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SMM Lead Market Morning Review (2014-7-9)
Jul 9,2014 09:51CST
price review forecast
LME lead prices are expected to hover between USD 2,195-2,225/mt on Wednesday, with solid support at the USD 2,200/mt and major moving averages.

SHANGHAI, Jul. 9 (SMM) – LME lead prices started overnight at USD 2,191.75/mt, but trading volumes were light in Asian trading hours. During European trading hours, the metal initially crept up, but later met resistance at USD 2,210/mt before ending up USD 17.5/mt, or 0.8%, at USD 2,207.5/mt. Trading volumes gained 4,089 lots to 7,196 lots, and positions added 134 lots to 130,329 lots. Meanwhile, LME lead inventories held unchanged at 21,360 mt.

Lead for August delivery, the most active contract, advanced to as high as RMB 14,200/mt during Tuesday’s night session on the Shanghai Futures Exchange. During the night session, total trading volumes climbed to the highest of 1,460 lots since February 20.

In Europe, trade data in Germany outstripped April’s reading and expectations in May, but that in France came in disappointing. UK manufacturing output grew by 3.7% YoY in May, missing a 4.4% rise in April and the expected 5.6% increase, while the country’s industrial output rose by 2.3%, short of April’s reading and forecasts. Meanwhile, shares in Commerzbank, Germany’s second-largest bank, fell on Tuesday after news that it could suffer at least USD 500 million in penalties. This put a damper on European stocks as a whole.

The Job Openings & Labor Turnover Survey (JOLTs) for May revealed that job openings in the US increased to 4.64 million, beating the expected 4.35 million and up from 4.46 million in April. The job opening rate rose to 3.2%, its refreshed high since August 2007, while the quits rate was unchanged at 1.8% in May. The hires rate, however, fell to 3.4% in May, with its April reading revised to 3.5%. These relatively positive jobs report raised expectations for the US Federal Reserve to hike interest rates earlier than expected, sending US stock indices down.

Meanwhile, Europe pledged that it will provide natural gas for Ukraine starting from September to counter the threat from Russia that it will cut supply to Ukraine. Europe is expected to supply 10 billion cubic meters per year, accounting for 20% of Ukraine’s demand

Alcoa, the world’s third largest producer of aluminum, kicked off the Q2 earnings season with better-than-expected results, which looks set to boost base metals markets.

LME lead prices are expected to hover between USD 2,195-2,225/mt on Wednesday, with solid support at the USD 2,200/mt and major moving averages. The most active SHFE 1408 lead contract is set to fluctuate between RMB 14,050-14,180/mt. In China’s physical lead markets, traded prices should hold steady at RMB 13,800-13,950/mt on Wednesday.

LME lead prices
SHFE lead prices
physical lead prices

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