SMM Lead Market Daily Review (2014-7-24)

SHANGHAI, Jul. 25 (SMM) – Total trading volumes were only 212 lots during Wednesday’s night session on the Shanghai Futures Exchange, and positions added 8 lots to 18,036 lots. With no major news available during the night session, trading activity was quite. No transactions were reported for the most active SHFE 1408 lead contract. The SHFE 1409 lead contract fell by RMB 10/mt, accounting for a majority of transactions.

On Thursday, SHFE lead prices dipped to RMB 14,100/mt after opening at RMB 14,130/mt, but later rose to a high of RMB 14,140/mt, boosted by HSBC’s flash China manufacturing PMI well exceeding expectations. The metal closed up RMB 30/mt at RMB 14,130/mt, with 512 lots traded and positions down 248 lots to 5,386 lots on Thursday.

In the Shanghai physical lead market, goods from Chihong Zn & Ge traded Thursday at RMB 14,060/mt, a RMB 65/mt discount over the most active SHFE 1408 lead contract. Traded prices were RMB 14,020-14,040/mt for Nanfang and Chengyuan brands, RMB 14,020-14,030/mt for Shuangyan brand, RMB 14,000/mt for Humon brand and RMB 13,990/mt for Shenqian brand. SHFE lead prices staged a rally after HSBC’s preliminary China manufacturing PMI came in positive. As a result, cargo holders held back goods from sale, cutting market supply. Meanwhile, some large downstream producers were only buying to need since they had built stocks previously. Trading activity was light on Thursday as low operating rates at downstream producers reduced demand for raw material.