SHANGHAI, Jul. 11 (SMM) – LME lead prices overnight rebounded after felling to the 20-day moving average, boosted by encouraging US initial jobless claims, and closed up USD 12.5/mt, or 0.57%, at USD 2,195.25/mt. Trading volumes gained 914 lots to 4,999 lots, while positions added 99 lots to 129,752 lots. Meanwhile, LME lead stocks held steady at 213,600 mt.
Lead for August delivery, the most active contract, ended Thursday’s night session down RMB 5/mt at RMB 14,045/mt on the Shanghai Futures Exchange. Trading volumes totaled 328 lots, down 58 lots from the previous night session.
Banco Espirito Santo (BES), Portugal’s largest listed bank by assets, suspended trading in its shares and listed bonds on concerns over the financial troubles of its largest shareholder, resulting in a plunge in European stocks. In response, precious metals prices rose. Although another round of European debt crisis is highly unlikely to resurface, investors are concerned over the economic recovery in the euro zone.
In the US, wholesale inventories and sales both missed expectations in May. The country’s initial jobless claims for the week ending in July 5 fell by 11,000 to 304,000, below the estimated 315,000, with the four-week moving average hitting its lowest since August 2007.
Meanwhile, China’s exports grew by only 7.2% in June, and the country’s imports rose by 5.5%, both short of expectations. China imported 350,000 mt of unwrought copper and copper semis in the month, down 7.9% and setting a low last seen in April 2013. The People’s Bank of China (PBOC) Governor Zhou Xiaochuan stated that the central bank will have its policy rate play a guiding role in the market via mechanisms on the monetary market, adding that the bank is preparing two or three sets of such tools. He also added that these tools will require collaterals. Previously, the Pledged Supplementary Lending (PSL) was expected to replace the PBOC’s existing re-lending monetary tool to supply low-cost funds to commercial banks in infrastructure and public welfare spending.
European and US stocks fell overnight across the board. LME base metals prices were mixed.
Lead prices will be restrained by risk aversion sentiment on Friday. LME lead prices dropped by USD 10.25/mt during the morning session, and are expected to move between USD 2,165-2,200/mt, meeting strong resistance at the USD 2,200/mt mark. The most active SHFE 1408 lead contract is set to hover between RMB 13,980-14,080/mt, and physical lead prices will trade at RMB 13,800-13,900/mt on Friday.